An Australian subsidiary of an overseas group has three sets of annual obligations: corporate obligations to ASIC, tax obligations to the ATO, and employer obligations once it has staff. One that is often missed is the financial report. A small proprietary company controlled by a foreign company must prepare, audit and lodge an annual financial report with ASIC, unless it is included in consolidated accounts lodged with ASIC, or it qualifies for, and properly relies on, ASIC’s relief for foreign-controlled companies. That relief moved to a new ASIC instrument on 17 September 2026.<\/p>\n\n\n\n
Each year on the company’s review date, generally the anniversary of its registration, ASIC issues an annual statement setting out the company’s details, with an invoice for the annual review fee.<\/p>\n\n\n\n
\u2022 The fee is due within two months after the review date.<\/p>\n\n\n\n
\u2022 Incorrect details on the statement must be corrected within 28 days after it is issued. Other changes, such as a new director, generally have to be notified within 28 days.<\/p>\n\n\n\n
\u2022 Unless the company has lodged a financial report with ASIC in the previous 12 months, the directors must pass a solvency resolution within two months after the review date. If the resolution is negative, or none is passed, ASIC must be notified within seven days.<\/p>\n\n\n\n
A small proprietary company that was controlled by a foreign company for all or part of the year must prepare a financial report and directors’ report, have the financial report audited, and lodge them with ASIC within four months after the end of the financial year, unless one of the following applies.<\/p>\n\n\n\n
Consolidated accounts.<\/em> The company is included for that year in consolidated financial statements lodged with ASIC by a registered foreign company, or by an Australian company, registered scheme or disclosing entity.<\/p>\n\n\n\n ASIC’s relief for small foreign-controlled companies.<\/em> Since 17 September 2026, this relief is in section 35 of ASIC Corporations (Annual and Half-year Reporting) Instrument 2026\/468, which replaced ASIC Corporations (Foreign-Controlled Company Reports) Instrument 2017\/204. The main conditions are:<\/p>\n\n\n\n \u2022 the company is not part of a large group. The group here is the company together with the foreign group’s other entities that are formed in, or carry on business in, Australia. It is large if it meets two of three tests: combined revenue of $50 million or more, combined gross assets of $25 million or more, or 100 or more employees;<\/p>\n\n\n\n \u2022 each year, the directors resolve to rely on the relief, no earlier than three months before the financial year starts;<\/p>\n\n\n\n \u2022 for the first year of reliance, or after a gap, notice of the resolution is lodged with ASIC on Form 384 between three months before the year starts and four months after it ends. No extension of time is available; and<\/p>\n\n\n\n \u2022 ASIC has not notified the company in writing that it may not rely on the relief.<\/p>\n\n\n\n A company that relied on the old instrument in the previous year carries across without a new Form 384. A company that stops relying on the relief must lodge either a financial report or a Form 394 for the first year it does not rely on it.<\/p>\n\n\n\n The large-group test is where companies most often go wrong. A subsidiary that is small on its own can still be part of a large group because of the group’s other Australian entities.<\/p>\n\n\n\n A company that is itself a large proprietary company, meeting two of consolidated revenue of $50 million or more, consolidated gross assets of $25 million or more, or 100 or more employees, cannot use this relief and generally must prepare, audit and lodge a financial report.<\/p>\n\n\n\n The company lodges an annual income tax return. It must also lodge an International Dealings Schedule if, among other things, it claims a deduction for interest or royalties paid overseas, its dealings with international related parties total more than $2 million for the year (counting property transferred and loan balances), it has overseas branch operations or interests in foreign entities, or the thin capitalisation rules apply to it. A subsidiary paying interest or royalties to its parent will usually need one.<\/p>\n\n\n\n Prices between the subsidiary and the rest of the group, for goods, services, management fees, royalties and loans, must be consistent with the arm’s length principle. For penalty purposes, a transfer pricing position is treated as reasonably arguable only if the company has records that are prepared before it lodges its tax return for the year, are in English or readily convertible into English, and explain how and why the arm’s length rules have been applied.<\/p>\n\n\n\n Smaller groups can use the ATO’s simplified transfer pricing record-keeping options in PCG 2017\/2. For example, the small taxpayer option is available where the Australian economic group’s turnover is under $50 million and other conditions are met. The options reduce the record-keeping work. They do not, on their own, provide the documentation needed for penalty protection, and their use must be disclosed in the International Dealings Schedule.<\/p>\n\n\n\n Interest, unfranked dividends and royalties paid to non-residents are subject to withholding tax: by default 10% on interest, 30% on unfranked dividends and 30% on royalties, reduced where a tax treaty applies. The withheld amounts are reported and paid through the activity statement, and an annual report of these payments is also due by 31 October each year. If the company fails to withhold, it can be liable for a penalty equal to the amount not withheld, and it loses the deduction for the interest or royalty unless the withholding tax is paid.<\/p>\n\n\n\n Once the company employs staff in Australia:<\/p>\n\n\n\n \u2022 PAYG withholding from wages, reported through Single Touch Payroll;<\/p>\n\n\n\n \u2022 superannuation guarantee of 12% of qualifying earnings, which since 1 July 2026 must reach each employee’s fund within seven business days after payday;<\/p>\n\n\n\n \u2022 fringe benefits tax, for the FBT year ending 31 March. If the employer lodges itself, the return is due 21 May;<\/p>\n\n\n\n \u2022 payroll tax, once wages paid by the company and any grouped businesses exceed the state threshold; and<\/p>\n\n\n\n \u2022 workers’ compensation insurance in each state where staff work.<\/p>\n\n\n\n Groups with annual global income of A$1 billion or more have further obligations, including:<\/p>\n\n\n\n \u2022 country-by-country reporting (a master file, local file and CbC report), due within 12 months after the end of the income year;<\/p>\n\n\n\n \u2022 general purpose financial statements given to the ATO by the tax return due date, where the company does not lodge them with ASIC; and<\/p>\n\n\n\n \u2022 for groups with annual revenue of \u20ac750 million or more, the global and domestic minimum tax returns, due 15 months after year end (18 months for the first year).<\/p>\n\n\n\n \u2022 31 October: annual report of interest, dividend and royalty payments to non-residents for the year just ended.<\/p>\n\n\n\n \u2022 31 October: financial report lodged with ASIC, where required.<\/p>\n\n\n\n \u2022 31 October: the latest date to lodge Form 384 for the year just ended, if the company is relying on ASIC’s relief for the first time.<\/p>\n\n\n\n \u2022 21 May: FBT return and payment, if the employer lodges itself.<\/p>\n\n\n\n \u2022 Within two months after each review date: ASIC annual review fee and, where needed, the solvency resolution.<\/p>\n\n\n\n If your group is still at the set-up stage, see our earlier article, Setting up in Australia: eight tax questions to answer before you start<\/a>.<\/p>\n\n\n\n MNY Group works with Australian subsidiaries of overseas groups on bookkeeping and payroll, tax compliance and international tax, ASIC compliance, and resident director and company secretarial services<\/a>, with statutory audits through MNY Audit and Assurance<\/a>. Where MNY Audit and Assurance is a company’s auditor, the auditor independence rules limit the other services we can provide to that company. We work in English and Chinese, from offices in Brisbane, Hobart, Melbourne, Perth and Sydney, with a team in Ho Chi Minh City.<\/p>\n\n\n\n \u2022 Corporations Act 2001<\/a><\/p>\n\n\n\n \u2022 ASIC Corporations (Annual and Half-year Reporting) Instrument 2026\/468<\/a><\/p>\n\n\n\n \u2022 ASIC: Company annual review<\/a><\/p>\n\n\n\n \u2022 ATO: International dealings schedule 2026 instructions<\/a><\/p>\n\n\n\n \u2022 ATO: PCG 2017\/2<\/a>, Simplified transfer pricing record keeping options<\/p>\n\n\n\n \u2022 ATO: PAYG withholding from interest, dividend and royalty payments to non-residents \u2014 annual report<\/a><\/p>\n\n\n\n \u2022 ATO: Payment deadlines for Payday Super<\/a><\/p>\n\n\n\n \u2022 ATO: Lodging your FBT return and paying<\/a><\/p>\n\n\n\n3. Tax return and international dealings schedule<\/h2>\n\n\n\n
4. Transfer pricing records<\/h2>\n\n\n\n
5. Withholding on payments to the parent<\/h2>\n\n\n\n
6. Employer obligations<\/h2>\n\n\n\n
7. Large groups<\/h2>\n\n\n\n
Key dates for a company with a 30 June year end<\/h2>\n\n\n\n
How we can help<\/h2>\n\n\n\n
Sources<\/h2>\n\n\n\n