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09 Jul 08 Decision Impact Statement - O'Brien

The ATO has published a Decision Impact Statement in relation to the AAT's decision in O'Brien v FCT [2008] AATA 86, 2008 ATC 10-002. The case concerned whether scheme penalty tax otherwise payable should be remitted in full on the basis that the applicant's subjective purpose in entering into a Part IVA scheme was not to obtain a tax benefit. The AAT decided that the penalty tax imposed by s 226 and reduced by s 226E should be remitted in full under s 227(3). The AAT found that "the evidence in this case does not indicate that the applicant participated in the scheme with the avowed purpose of tax avoidance". The ATO says it accepts that the decision was based on the evidence before the AAT and considers that it is confined to the particular facts of the case. The ATO says it recognises that the decision is consistent with paragraph 2 of Taxation Ruling Taxation Ruling TR 94/7 that states that "Each case should be decided on the basis of its own facts and circumstances."

For a copy of the Decision Impact Statement, go here

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