Virgin Holdings SA v Commissioner of Taxation [2008] FCA 1503

FEDERAL COURT OF AUSTRALIA

Virgin Holdings SA v Commissioner of Taxation [2008] FCA 1503

INCOME TAX – Part 3-1 of the Income Tax Assessment Act 1997 (Cth) – capital gain on sale by Swiss resident company of shares in an Australian company – whether Australia denied the right to tax gain by Swiss-Australia double taxation agreement – Sch 15 to International Tax Agreements Act 1953 (Cth) – general principles of interpretation of double tax treaties – whether 'the Australian income tax' covers taxation of capital gains (Art 2) – ambit of business profits (Art 7) and alienation of capital assets (Art 13) provisions HELD – Australia denied the right to tax gain Commonwealth Constitution ss 55, 114 Income Tax Assessment Act 1915 (Cth) s 53 Income Tax Assessment Act 1922 (Cth) ss 16B, 17, 93 Income Tax Assessment Act 1936 (Cth) Part IIIA, ss 25A, 26, 26AAA, 36, 47, 160ZO, 167, 260 International Tax Agreements Act 1953 (Cth)ss 3, 4, 11E, Sch 15 Income Tax Assessment Act 1997 (Cth)Part 3-1, s 102-5 Taxes Consolidation Act 1997 (Ire) Vienna Convention on the Law of Treaties. Opened for signature 23 May 1969. [1974] ATS 2 art 31, 32. (Entered into force 27 January 1980) Agreement between Australia and Switzerland for the Avoidance of Double Taxation with respect to Taxes of Income. Opened for signature 28 February 1980. [1981] ATS 5 art 2, 3, 7, 13. (Entered into force 13 February 1981) Applicant A v Minister for Immigration and Ethnic Affairs (1996) 190 CLR 225 Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597 Federal Commissioner of Taxation v Sherritt Gordon Mines Limited (1977) 137 CLR 612 Gadsden v Minister for National Revenue 83 DTC 127 (Tax Review Board) Hastie Group Limited v Commissioner of Taxation 2008 ATC 20-019 Kinsella v Revenue Commissioners [2007] IEHC 250; (2007) 10 ITLR 63 McDermott Industries (Aust) Pty Ltd v Commissioner of Taxation (2005) 142 FCR 134 Resch v Federal Commissioner of Taxation (1942) 66 CLR 198 South Australia v Commonwealth (1992) 174 CLR 235 Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338 The Hon Justice Gzell, Treaty Application to a Capital Gains Tax after Conclusion of the Treaty (2002) 76 ALJ 309 Avery Jones et al, The Interpretation of Tax Treaties with Particular Reference to Article 3(2) of the OECD Model (1984)BTR 14 Deutsch RL and Sharkey N, Australia's Capital Gains Tax and Double Taxation Agreements (2002)56(6), Bulletin for International Fiscal Documentation 228 OECD Committee on Fiscal Affairs, 1992 OECD Model, Official Commentary on Article 3 The Hon P Keating MP, 22 May 1986, Second Reading Speech, Income Tax Assessment Amendment (Capital Gains) Bill 1986 (Cth) Vogel et al, Klaus Vogel on Double Taxation Conventions (3rd ed., Kluwer Law International, 1997) VIRGIN HOLDINGS SA v COMMISSIONER OF TAXATION