Walstern v Commissioner of Taxation [2003] FCA 1428

FEDERAL COURT OF AUSTRALIA Walstern v Commissioner of Taxation [2003] FCA 1428 TAXATION – income tax – deduction claimed for contribution made to an off-shore non-complying superannuation fund - whether a private company employer can obtain unlimited deductions for contributions made to a superannuation fund benefiting employees who are directors and shareholders where those employees wish to obtain for themselves retained profits held by the employer to invest for their own benefit – whether contribution to fund made by employer for the purpose of making provision for superannuation benefits.

TAXATION – fringe benefits tax – whether fringe benefits tax payable where contribution made to superannuation fund and subsequently allocated for the benefit of employee not a member at the time the contribution was made. TAXATION – penalties – whether reasonably arguable position that deduction allowable – whether exercise of discretion to remit penalty for fringe benefits tax miscarried. Fringe Benefits Tax Assessment Act 1986 (Cth) s 67, s 114, s 116, s 117, s 136(1) Income Tax Assessment Act 1936 (Cth) s 51(1), s 78(11), s 82AAE, s 226C, s 226K, s 267(1) Income Tax Assessment Act 1997 (Cth) s 8-1(1), s 25-50 Superannuation Industry (Supervision) Act 1993 (Cth) s 45 Taxation Administration Act 1953 (Cth) Division 284 Essenbourne Pty Ltd v Commissioner of Taxation (2002) 2002 ATC 5201 approved Federal Commissioner of Taxation v Roche (1991) 105 ALR 95 approved Kumagai Gumi Co Ltd v Federal Commissioner of Taxation (1999) 90 FCR 274 referred to Queensland v The Commonwealth (1987) 162 CLR 74 approved Raymor Contractors Pty Ltd v Federal Commissioner of Taxation (1991) 91 ATC 4259 approved Scott v Federal Commissioner of Taxation (No 2) (1966) 177 CLR 514 applied WALSTERN PTY LTD (ACN 010 567 772) v COMMISSIONER OF TAXATION N 706/02 N 707/02 N 708/02 N 709/02 HILL J 8 DECEMBER 2003 SYDNEY