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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private advice

Authorisation Number: 1051752195277

Date of advice: 10 September 2020

Ruling

Subject: International issues - permanent establishments

Question 1

Does Foreign Co have a permanent establishment (PE) in Australia as defined by Article 5 of the Relevant Tax Treaty?

Answer

Yes

Question 2

Will the profit from the transactions between Foreign Co and Third Party Co (TPC) be attributable to the Foreign Co PE under Article 7 of the Relevant Tax Treaty?

Answer

Yes

Question 3

Is the interest derived on the loan from Foreign Co to Aus Co attributable to Foreign Co under Article 11 of the Relevant Tax Treaty such that the interest income will be subject to withholding tax in accordance with section 128B of the Income Tax Assessment Act 1936 (ITAA 1936)?

Answer

Yes

Question 4

Is the Foreign Co PE, in respect of its Foreign workers providing services to satisfy the contract with TPC, required to withhold amounts under section 12-35 of Schedule 1 of the Taxation Administration Act 1953 (TAA 1953)?

Answer

Yes

Question 5

Is the Foreign Co PE, in respect of its Foreign workers providing services to satisfy the contract with TPC, required to withhold amounts under the Superannuation Guarantee Administration Act 1992 (SGAA)?

Answer

Yes

This ruling applies for the following period:

1 July 2019 to 30 June 2020

The scheme commences on:

1 July 2019

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