02 Jul 1212 Decision Impact Statement - Russell
The ATO has published a Decision Impact Statement in relation to the decision of the Full Federal Court in Russell v FCT  FCAFC 10; 2011 ATC 20-240; (2011) 79 ATR 315. The case concerned, first, whether an overseas registered company is a 'personal services entity' and if payments to it are the taxpayer's assessable income. Secondly, whether a partnership carried on enterprises and is entitled to input tax credits.
The ATO view of the decision is as follows:
"The ITAA 1997 does not bring to tax the profits of a New Zealand company but taxes, as statutory income, the personal services income of the individual. The facts of this case were unusual and it is not expected a factual scenario of like kind will often arise.
It was open on the facts to find that the partnership was carrying on a forestry enterprise and naturist retreat enterprise."