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Full Federal Court dismisses Citigroup’s Pt IVA appeal

Published on 01 Jun 11 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

The recent judgment of the Full Court of the Federal Court in the Citigroup case is important from several points of view, notably, because it is the first to consider the amendments to Pt IVA of the Income Tax Assessment Act 1936 (Cth) which included the generation of foreign tax credits as a "tax benefit" susceptible to Pt IVA. It also confirms that, when considering whether Pt IVA can apply, it will be important to point to non-tax-related commercial benefits from a transaction to ensure that contemporaneous analysis and focus are on those aspects.

This article considers the issues raised on the taxpayer's appeal, including whether a "but for" test was applied in the Federal Court, the appropriateness of a post-tax cash flow negative analysis, and whether excess foreign tax credits had been generated, and discusses the response of the court to each of those issues.

Author profile:

Author Photo - Joanne Dunne CTA
Joanne Dunne CTA
Joanne is a Tax Partner at Minter Ellison, Melbourne. Joanne has more than 20 years experience in tax in both Australia and New Zealand, including in advising and assisting clients in the e-commerce industry or which have a digital presence in commercial and tax structuring, international tax, residency and source issues, and contract issues. Current at 23 March 2016 Click here to expand/collapse more articles by Joanne DUNNE.
 
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