Commissioner of Taxation v Noza Holdings Pty Ltd [2012] FCAFC 43

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Noza Holdings Pty Ltd [2012] FCAFC 43 Citation: Commissioner of Taxation v Noza Holdings Pty Ltd [2012] FCAFC 43

Appeal from: Noza Holdings Pty Ltd v Commissioner of Taxation [2011] FCA 46

Parties: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v NOZA HOLDINGS PTY LTD (ACN 098 410 881)

File numbers: VID 195 of 2011 VID 196 of 2011 VID 197 of 2011 VID 198 of 2011 VID 200 of 2011

Parties: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v ITW AFC PTY LIMITED (ACN 091 191 865)

File number: VID 201 of 2011

Judges: EDMONDS, JESSUP AND ROBERTSON JJ

Date of judgment: 28 March 2012

Date of Corrigendum: 20 April 2012

Catchwords: INCOME TAX – whether dividend declared is an allowable deduction under s 25-90 of Income Tax Assessment Act 1997 (Cth) in year of declaration – operation of s 254V(2) of Corporations Act 2001 (Cth) even if insufficient profits to pay dividend – whether debt created on declaration and therefore outgoing incurred at that time – if not, whether outgoing incurred on payment of dividend in same circumstances – alternatively, whether outgoing incurred on an accruals basis by virtue of terms on which shares issued absent declaration and payment – whether outgoing incurred in deriving income from foreign source – whether dividend invalid and instrument of payment unenforceable – whether dividend income or capital at general law – appropriate time to consider taxpayer's expectation as to derivation of income Held: Outgoing incurred in year of declaration of dividend in deriving income from a foreign source; to the extent other requirements of s 25-90 conceded or satisfied, the amount of the outgoing is an allowable deduction under s 25-90.