Fowler v Commissioner of Taxation [2008] FCA 528

FEDERAL COURT OF AUSTRALIA

Fowler v Commissioner of Taxation [2008] FCA 528

INCOME TAX – Part 2-42 of the Income Tax Assessment Act 1997 (Cth) – "personal services income" – taxpayer, a computer consultant – taxpayer's services were made available to labour hire firms by a company of which taxpayer was sole shareholder, director and employee – whether amounts paid by labour hire firms to taxpayer's company were made part of taxpayer's "statutory income" by Pt 2-42 of Act – whether overriding principle that there must be derivation by an entity beneficially, so that entity becomes the beneficial owner of the income, in order for income tax to be imposed – Held: There is no such overriding principle to which the statutory income provisions were subject, and the Act made the amounts received by the company from the labour hire firm "statutory income" and therefore "assessable income" of the taxpayer. Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) Pt 1-3, ss 4-1, 4-5, 4-10, 4-15, 6-5, 6-10; Pt 1.4, s 10-5; Pt 2-42, ss 84-1, 84-5, 86-1, 86-10, 86-15 , 86-30, 87-10, 87-15 Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 followed Fowler and Commissioner of Taxation; Re [2006] AATA 808; (2006) 64 ATR 1113 affirmed R v Barger (1908) 6 CLR 41 followed DAVID FOWLER v COMMISSIONER OF TAXATION

NSD 2117 of 2006

LINDGREN J

21 APRIL 2008

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 2117 of 2006

ON APPEAL FROM THE TAXATION APPEALS DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY A PRESIDENTIAL MEMBER

BETWEEN: DAVID FOWLER

Applicant

AND: COMMISSIONER OF TAXATION

Respondent

JUDGE: LINDGREN J DATE OF ORDER: 21 APRIL 2008

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed. 2. The applicant pay the respondent's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA