Tax Treatments and Implications for Foreigners Investing in the Agricultural Businesses in Australia

BLO2206 AUSTRALIAN TAXATION
LAW AND PRACTICE
ASSIGNMENT
Trimester 3, 2018

Table of Contents
Tax treatments and implications for foreigners investing in the Agricultural Businesses in
Australia...........................................................................................................................................3
Description of foreigners in Australian taxation law...................................................................3
Description of tax treatments for foreign residents.....................................................................4
Implications of described treatment to foreigners.......................................................................6
Recommendations for relevant law forms...................................................................................7
References........................................................................................................................................9

TAX TREATMENTS AND IMPLICATIONS FOR FOREIGNERS
INVESTING IN THE AGRICULTURAL BUSINESSES IN
AUSTRALIA
Description of foreigners in Australian taxation law
The foreign resident is similar to a non-resident, which means they can be a resident of Australia
for the purpose of the tax even if they are not the citizen of Australia or permanent resident. They
might possess a visa for entering in Australia, but are not considered as the resident of Australia
for the purpose of the tax1. There are three ways by which a business might be assessed to be an
Australian resident for the purpose of tax which is where the business is incorporated in
Australia, where the business is not incorporated within Australia, and the business conducts
business within Australia and its power of voting is governed by shareholders who are Australian
residents. It is essential that all the tests which are Residency - the resides test, Residency - the
domicile test, Residency - the 183-day test, Residency - the superannuation test must be satisfied
to be called as a foreign resident for income tax purposes2. Apart from the individuals who do
not satisfy the conditions of the test, following individuals are also considered as foreigners for
the purpose of taxation:
 Individuals to visit Australia and for the majority of the time they are travelling and
operating in several locations
 Individuals holidaying within Australia or having visited for not more than six months
 Individuals to leave Australia on a permanent basis 3
Further, all the company considered as foreign resident company in Australia except in following
circumstances –
1 Lam, Dung, and Alex Whitney. "Taxation and property: Practical aspects of the new foreign resident CGT
witholding tax (2016) LSJ: Law Society of NSW Journal 21: 84.
2 Burns, Andrew. "Mid market focus: Tax considerations when doing business offshore. (2017) 51, no. 10Taxation
in Australia : 535.
3 Australia Broadens The Tax ‘Resident’ Test For Foreign Incorporated Companies (2019) RSM Australia
<https://www.rsm.global/australia/insights/tax-insights/australia-broadens-tax-resident-test-foreign-incorporated-
companies>