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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 [2011] 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."


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