Esso Australia Resources Pty Ltd v The Commissioner of Taxation [2011] FCA 565

FEDERAL COURT OF AUSTRALIA

Esso Australia Resources Pty Ltd v The Commissioner of Taxation [2011] FCA 565 Citation: Esso Australia Resources Pty Ltd v The Commissioner of Taxation [2011] FCA 565

Parties: ESSO AUSTRALIA RESOURCES PTY LTD v THE COMMISSIONER OF TAXATION

File number(s): VID 863 of 2008 VID 864 of 2008

Judge: RYAN J

Date of judgment: 30 May 2011

Catchwords: TAXATION – Petroleum resource rent tax – Deductible expenditure – Taxpayer contracting with subsidiary ("Contractor") for, amongst other things, the provision by Contractor of operations and facilities or other things involved in or in connection with exploration for petroleum or in the provision of operations or facilities comprising a petroleum project – Contract providing for payment of Contractor's costs, including overhead or indirect expenses, plus a margin or "mark-up" of 7½% - Whether payment by taxpayer of the whole of price payable to Contractor and referable to the subject project liable to be made by taxpayer in accordance with s 37 and s 38 of the Petroleum Resources Rent Tax Assessment Act 1987 (Cth) ("the Act") – Whether any part of the price or fee payable to Contractor excluded from deductibility by s 44 of the Act – Whether liability to pay contribution or fee to US affiliate of taxpayer for "mutualised research" part of which benefited or was used in the subject project was incurred in or in connection with exploration for petroleum or in the provision of operations or facilities comprising the subject petroleum project.

Legislation: Income Tax Assessment Act 1997 (Cth) s 8-1 Income Tax Assessment Act 1936 (Cth) s 51(1) Petroleum Resource Rent Tax Assessment Act 1987 (Cth) ss 19(4), 21, 22, 32, 34A(2), 37, 38, 41, 44 and 45A