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  • COVID-19 and permanent establishments

    We have updated our guidance on whether the presence of employees in Australia, due to the impacts of COVID-19, may create a permanent establishment.

    COVID-19 has resulted in overseas travel restrictions. Foreign companies may be concerned about potential effects on their business and tax affairs because of the presence of employees in Australia.

    Our updated guidance states that we will not apply compliance resources to determine if you have a permanent establishment in Australia if:

    • you did not otherwise have a permanent establishment in Australia before the effects of COVID-19
    • the temporary presence of employees in Australia continues to solely be as a result of COVID-19 related travel restrictions
    • those employees temporarily in Australia will relocate overseas as soon as practicable following the relaxation of international travel restrictions
    • you have not recognised those employees as creating a permanent establishment or generating Australian source income in Australia for the purpose of the tax laws of another jurisdiction.

    This approach is applicable until 31 December 2021.

    From 1 January 2022, this approach will cease to apply and you will be required to consider whether ongoing arrangements give rise to a permanent establishment in Australia. You should contact the ATO and apply for early engagement to discuss the taxation consequences of these ongoing arrangements after that date.

    Read more about COVID-19 and permanent establishments or you can also email us at

    See also:

    Last modified: 25 May 2021QC 64197