16 Dec 09 Decision Impact Statement - Sydney Refractive Surgery Centre
The ATO has published a Decision Impact Statement in relation to the Full Federal Court decision in FCT v Sydney Refractive Surgery Centre Pty Ltd  FCAFC 190; 2008 ATC 20-081; (2008) 73 ATR 28. The case concerned the assessability under s 6-5 of ITAA 1997 of an amount in relation to damages awarded to a corporate taxpayer as a result of defamation proceedings. The Court said that an award of damages for an injury to a corporation's reputation is no different from an award for the loss of an individual's arm or any other injury impairing earning capacity. It was therefore not assessable.
The ATO says that it did not seek special leave to appeal as the decision of the Full Federal Court was open to it on the facts of the case. In addition, its application to corporations needs to be considered in light of amendments subsequently made to the defamation laws in all of the states and territories. An example is to be found at section 9 of the Defamation Act 2005 (NSW) where certain corporations do not have a cause of action for defamation.
For a copy of the Decision Impact Statement, go here