The ATO updated its corporate tax residency guidelines on 11 June 2025, clarifying the central management and control (CMC) test 

The Australian Taxation Office (ATO) updated its corporate tax residency guidelines in PCG 2018/9 on 11 June 2025, focusing on the central management and control (CMC) test.

The ATO’s amendment states that if a company treats a foreign subsidiary differently for tax purposes and in its consolidated entity disclosure statement (CEDS), it must explain the inconsistency.

This Guideline contains practical guidance to assist foreign-incorporated companies and their advisors in applying the principles set out in Taxation Ruling TR 2018/5 Income tax: central management and control test of residency. This will help these companies determine whether they are resident under the central management and control test of company residency in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936).

This Guideline must be read in conjunction with TR 2018/5, which sets out the Commissioner’s views on the meaning of central management and control, and the principles relevant to determining whether a company incorporated outside Australia is a resident under the central management and control test of residency.

The examples and guidance in this Guideline are general. They cannot and do not cover every possible circumstance relevant to determining whether a company is resident or non-resident under the central management and control test of company residency.

Foreign-incorporated companies that are unsure whether they are resident after having considered TR 2018/5 and this Guideline are encouraged to approach the ATO to discuss their circumstances.

This Guideline does not deal with the associated questions of:

  • The voting power test of company residency for foreign-incorporated companies, or
  • When a company carries on business.

A company is a resident or resident of Australia if:

  • It is incorporated in Australia, or
  • It is not incorporated in Australia, it carries on business in Australia and has either its voting power controlled by shareholders who are residents of Australia (the voting power test of residency) or central management and control in Australia (the central management and control test of residency).