Tax & ATO News Australia

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High Court Case helps determine questions of facts vs. questions of law in AAT hearings

The ATO has recently released a decision impact statement on a High Court tax case that SMH Tax Lawyers won last year, Commissioner of Taxation v Crown Insurance Limited.

 

The ATO concluded that this case has no precedential value and is confined to its facts (which begs the question as to why they wasted tax payers money and that of our client pursuing the matter through to the High Court and losing), but we respectfully disagree.
 
Quite aside from clarifying issues regarding the source of overseas income, this case was very important in helping to determine what matters are questions of facts (and therefore not able to be appealed to the Federal Court after an Administrative Appeals Tribunal decision) and what are questions of law (and therefore can be appealed).
 
This question is at the heart of very many appeals from the AAT.
 
It also emphasises how important it is to present the facts in a clear, concise and compelling matter in AAT hearings.  If you do not get the facts right in AAT hearings (which the vast majority of taxpayers do not), then your chances of losing are very high and your chances of successfully appealing are negligible.
 
At SMH Tax Lawyers one of our most critical specialist roles is helping our clients present the facts properly.  This is something we are uniquely placed to assist with as lawyers with specialist litigation and tax experience and the resources to work with our clients in forensically examining complicated facts which can cover many years, and often many countries.
 
With this assistance, our clients have achieved highly successful results in tax litigation matters against the ATO.
 

Posted in: Tax & ATO News Australia at 24 January 14

Qantas loses GST battle with ATO

On 2 October 2012, a landmark decision was handed down by the High Court of Australia in favour of the Commissioner of the Taxation.

 

The majority held that that Qantas must pay GST to the Commissioner of Taxation on tickets sold for flights that were never taken, and where customers never sought a refund.
 
Qantas argued that it was entitled to keep $34 million in GST on non-refundable and refundable but unclaimed tickets as it had not made a supply.
 
On the other hand, the Commissioner of Taxation argued that Qantas had made a supply by keeping its fares for its customers.
 
However, after examining the terms and conditions of Qantas’ contracts with its passengers, the majority held that Qantas does not provide an unconditional promise to carry passengers or their baggage on a particular flight. 
 
Instead the majority held that, “[Qantas] supplied something less than that. This was at least a promise to use the best endeavours to carry the passenger and baggage having regard to the circumstances of the business operations on the airline. This was a ‘taxable supply’ for which the consideration, being the fare was received.”
 
This case makes it clear that taxable supply is made incurring GST liability even if a passenger does not show up for their flight. This decision could therefore implicate other businesses that charge GST on non-refundable tickets, such as tour companies, ticket operators and other transport operators.
 

Posted in: Tax & ATO News Australia at 05 October 12

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Tax & ATO News Australia

Author: David Hughes

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