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Origin: An electric shock

Published on 01 Jun 20 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

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.

Author profile

Enzo Coia CTA
Enzo is a Tax Partner at Deloitte with over 20 years’ experience providing advice on Australian and international taxation matters. Enzo specialises in M&A, financing, capital management and dealing with revenue authorities. He is expertly placed to understand clients’ needs, having spent several years in a senior tax leadership position at a multinational oil and gas company. - Current at 30 November 2020
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