Esso Australia Resources Pty Ltd v Commissioner of Taxation [2012] FCAFC 5

FEDERAL COURT OF AUSTRALIA

Esso Australia Resources Pty Ltd v Commissioner of Taxation [2012] FCAFC 5 Citation: Esso Australia Resources Pty Ltd v Commissioner of Taxation [2012] FCAFC 5

Appeal from: Esso Australia Resources Pty Ltd v Commissioner of Taxation [2011] FCA 565

Parties: ESSO AUSTRALIA RESOURCES PTY LTD (ACN 091 829 819) v THE COMMISSIONER OF TAXATION

File number(s): VID 630 of 2011 VID 631 of 2011

Judges: KEANE CJ, EDMONDS, PERRAM JJ

Date of judgment: 20 February 2012

Catchwords: TAXATION – Liability to tax in relation to a petroleum project – taxable profit being the excess of assessable receipts over deductible expenditure incurred in the petroleum project – deductible expenditure – general project expenditure – joint venture of a petroleum project where one party agrees to act as Operator – Service Agreement entered into with subsidiary (Contractor) to provide personnel, equipment and facilities to enable the Operator to conduct petroleum exploration, production and marketing operations – Operator agreed to pay Contractor's cost incurred in providing the services, a share of Contractor's overhead costs proportionate to the services provided, and a fee of 7 ½ % – whether gave rise to a liability to make a single, undifferentiated payment or series of payments, or if allocation and apportionment of the payments should be undertaken – whether payments deductible as a result of occurring in carrying on or providing operations, facilities and other things comprising the joint venture project – deductibility of fee paid by Operator to take part in a Mutualised Research Program in return for the right to use intellectual property and research in carrying on the project.