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ATO Hails Court Win Over Companies' Tax Residence

by Mary Swire, Tax-News.com, Hong Kong

16 November 2016


The Australian Taxation Office (ATO) has welcomed a High Court ruling against arrangements that it had said were simply intended to circumvent Australian tax.

On November 16, the High Court dismissed an appeal by Hua Wang Bank Berhad and Bywater Investments Limited. Tax Commissioner Chris Jordan said: "This case has had a substantial litigation history – including 19 challenges to the evidence and procedure at the Federal Court, followed by an appeal to the Full Federal Court. This was not an easy process."

The Court found that the corporate entities were residents of Australia for tax purposes. The ATO explained that the High Court "found that the company should not be regarded as residing outside Australia merely because it had established a board of directors abroad to act upon the dictates of an Australian resident." The Court said that although the companies' officers were outside Australia, they did no more than 'rubber stamp' decisions made in Australia.

Jordan stressed that the ATO will not shy away from difficult and complex cases. "This result only strengthens our resolve. It shows that we are on the right track in pursuing these strategic cases to ensure the law is upheld and the integrity of our tax system is maintained," he said.

TAGS: court | compliance | tax | value added tax (VAT) | tax compliance | law | goods and services tax (GST) | Australia | enforcement | tax authority | transfer pricing | services | Tax | Tax Evasion | BEPS

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