Income tax 2020

Origin: An electric shock

Source: Taxation In Australia Journal Article

Published Date: 1 Jun 2020


The Federal Court recently decided the case of Origin Energy Ltd v FCT (No. 2), with Thawley J handing down his judgment on 30 March 2020. The case concerned payments for the supply of electricity over a period of many years. The Commissioner was successful in arguing the payments were non-deductible on the basis they were capital in nature. The decision is consistent with recent tax cases that apply a pragmatic and purposive view of the facts rather than a literal interpretation of the legal agreements. Substance over form. The case also contains some helpful insights on the potential breadth (or lack of breadth) of s 40-880 of the Income Tax Assessment Act 1997, which allows deductions for certain business capital expenditure.

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Income tax 2020

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