International Business Machines Corporation v Commissioner of Taxation [2011] FCA 335

FEDERAL COURT OF AUSTRALIA

International Business Machines Corporation v Commissioner of Taxation [2011] FCA 335 Citation: International Business Machines Corporation v Commissioner of Taxation [2011] FCA 335

Parties: INTERNATIONAL BUSINESS MACHINES CORPORATION and IBM WORLD TRADE CORPORATION v COMMISSIONER OF TAXATION

File number: NSD 661 of 2009

Judge: BENNETT J

Date of judgment: 12 April 2011

Catchwords: TAXATION – payments made from resident company to non-resident company pursuant to Software Licence Agreement – whether full amount of payments liable to withholding tax as royalties – whether payments are royalties pursuant to Article 12(4) of the "Convention between the Government of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income" in Schedule 2 of the International Tax Agreements Act 1953 (Cth) INTELLECTUAL PROPERTY – whether rights granted under Software Licence Agreement are intellectual property rights – whether rights granted under Software Licence Agreement are for the supply of scientific, technical, industrial or commercial knowledge or information owned by any person – whether rights granted under Software Licence Agreement are rights to use, distribute and market computer programs CONTRACTS – whether ambiguity

Words & Phrases: "royalties", "under copyrights, mask work rights, and patents"

Legislation: International Tax Agreements Act 1953 (Cth) s 4(2), Article 12(4) of Schedule 2 Income Tax Assessment Act 1936 (Cth) ss 128B(5A), 128C Federal Court Rules O 29 r 2