ABB Australia Pty Limited v Commissioner of Taxation [2007] FCA 1063

FEDERAL COURT OF AUSTRALIA

ABB Australia Pty Limited v Commissioner of Taxation [2007] FCA 1063

INCOME TAX – withholding tax under Div 11A of Pt III of Income Tax Assessment Act 1936 (Cth) – Australian resident company wholly owned subsidiary of Swiss parent company – Australian company declares dividend payable 22 days after date of declaration – Swiss parent contracts to sell right to receive dividend to English company – English company contracts to sell right to receive dividend to Australian resident company – Swiss company directs Australian subsidiary to pay dividend to end purchaser Australian resident company by paying into its bank account in Sydney – when date for payment arrives, Australian subsidiary does so – whether income consisting of dividend was "derived" by Swiss parent upon declaration of dividend – in alternative, whether Swiss company derived income consisting of dividend by payment made to end purchaser Australian resident company –relevance of evidence of business and accounting practice relating to derivation of dividend income – whether liability to withholding tax can be avoided by assignment of assignment of right to receive dividend without assignment of underlying shares. Held: (1) evidence of business and accounting practice admissible; (2) income consisting of dividend derived by Swiss parent upon declaration of dividend by Australian subsidiary; (3) alternatively, income consisting of dividend derived by Swiss parent upon payment to Australian end buyer.

WORDS AND PHRASES – "paid", "derived"

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