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  • Part 2 - Taxation of branch profits



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Listed country branch income of a resident company that is not assessable

    Which resident companies qualify?

    Two broad groups qualify to have certain branch profits treated as non-assessable non-exempt income. These are resident companies that either:

    • carry on business through a permanent establishment - for example, a branch - in a listed country or
    • are partners of a partnership - or are presently entitled beneficiaries of a trust - that carries on business through a permanent establishment in a listed country.

    Non-assessable non-exempt income treatment does not apply to:

    • resident companies with permanent establishments in unlisted countries
    • resident taxpayers, other than companies, with foreign permanent establishments.

    What is a permanent establishment?

    A permanent establishment of an Australian resident company is a place through which the business of the company is carried on. The term 'permanent establishment' is defined in section 6 of the Act.

    If the listed country is one with which Australia has a double taxation agreement, the meaning of the term permanent establishment is determined by the agreement.

    Permanent establishments are referred to as branches in this part.

    Last modified: 05 Dec 2006QC 17522