The role of foreign tax outcomes in defending cases under Pt IVA
Source: The Tax Specialist Journal Article
Published Date: 1 Feb 2013
Part IVA, the general anti-avoidance provision of the Income Tax Assessment Act 1936 (Cth), applies only where a taxpayer has a sole or dominant purpose of achieving a tax benefit. A tax benefit is a reduction in Australian tax liability when the scheme undertaken by the taxpayer is compared to a reasonable counterfactual. Recent case law suggests that, where taxpayers obtain both foreign and Australian tax benefits under a transaction, the foreign tax advantages may provide a defence to both the tax benefit and purpose elements of Pt IVA.
This article examines in detail recent cases which show that, where a tax arbitrage transaction is undertaken, it is possible to argue successfully that the purpose requirement of Pt IVA is not satisfied due to the foreign tax consequences of the transaction, and that tax arbitrage transactions that generate foreign tax benefits for a related party may be more likely to be protected from Pt IVA than tax arbitrage transactions which do not.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
- Published By: Gareth Redenbach
- Published On:1 Feb 2013
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
Copyright Statement
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags
Share this page