Transitional relief period for central management and control test extended

Transitional relief period extended

The announcement is good news for companies that have been experiencing difficulty in complying with the changes.


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The Australian Taxation Office (ATO) has recently announced an extension to the transitional compliance approach period in Practical Compliance Guideline – Central management and control test of residency: identifying where a company’s central management and control is located (PCG 2018/9), acknowledging the effort of companies who are taking active and timely steps to change their governance arrangements in accordance with the approach envisaged within the PCG.

The update, extends the transitional period for an early balancer taxpayer with a 31 December year end to until 31 December 2020. Likewise, taxpayers with a 30 June year end will have an extension of their transitional period to until 30 June 2021.

The Commissioner has further confirmed penalties will not be pursued for either:

a failure to lodge taxation documents in the approved form as a result of residency status for companies that adhere to the transitional arrangement stipulated within the PCG;
a failure to lodge a return as a result of an honest but mistaken belief that the company was a non-resident.

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