Visy Industries USA Pty Ltd v Commissioner of Taxation [2011] FCA 1065

FEDERAL COURT OF AUSTRALIA

Visy Industries USA Pty Ltd v Commissioner of Taxation [2011] FCA 1065 Citation: Visy Industries USA Pty Ltd v Commissioner of Taxation [2011] FCA 1065

Parties: VISY INDUSTRIES USA PTY LTD (ACN 005 449 445) v COMMISSIONER OF TAXATION

File numbers: VID 1151 of 2010 VID 1152 of 2010

Judge: GORDON J

Date of judgment: 14 September 2011

Catchwords: INCOME TAX – allowable deduction – Income Tax Assessment Act 1997 (Cth) s 8-1 – forward exchange contract – internal hedge – indemnity fee – isolated transaction – commercial transaction – adventure in the nature of trade – profit-making purpose – wager – incurred in gaining or producing assessable income – loss or outgoing of capital or in the nature of capital

Legislation: Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth)

Cases cited: American Leaf Blending Co Sdn Bhd v Director-General of Inland Revenue [1979] AC 676 Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 Babka v Federal Commissioner of Taxation (1989) 89 ATC 4963 BHP Billiton Finance Ltd v Federal Commissioner of Taxation (2009) 72 ATR 746 BP Australia Ltd v Federal Commissioner of Taxation (1965) 112 CLR 386 Brajkovich v Federal Commissioner of Taxation (1989) 89 ALR 408 Brookton Co-operative Society Ltd v Federal Commissioner of Taxation (1981) 147 CLR 441 Cecil Bros Pty Ltd v Federal Commissioner of Taxation (1964) 111 CLR 430 Commissioner of Taxation of the Commonwealth of Australia v Citylink Melbourne Limited (2006) 228 CLR 1 Commissioner of Taxation v Cooling (1990) 22 FCR 42 Commissioner of Taxation v Lau (1984) 6 FCR 202 Commissioner of Taxation v Raymor (NSW) Pty Ltd (1990) 24 FCR 90 Commissioner of Taxation v Roberts and Smith (1992) 37 FCR 246 Cooper (Inspector of Taxes) v Stubbs [1925] 2 KB 753 Comptroller-General of Customs v AMI Toyota Ltd [1989] VR 231 David Securities Pty Limited v Commonwealth Bank of Australia [1990] FCA 186 Development Finance Corporation of New Zealand Ltd v Bielby [1991] 1 NZLR 587 Drambo Pty Limited v Westpac Banking Corporation Limited (1996) 96 ATC 4737 Esso Australia Resources Pty Ltd v Commissioner of Taxation [2011] FCA 565 Federal Commissioner of Taxation v Anstis (2010) 241 CLR 443 Federal Commissioner of Taxation v Ashwick (Qld) No 127 Pty Ltd (2011) 192 FCR 325 Federal Commissioner of Taxation v BHP Billiton Finance Limited (2010) 182 FCR 526 Federal Commissioner of Taxation v Day (2008) 236 CLR 163 Federal Commissioner of Taxation v Day (2007) 164 FCR 250 Federal Commissioner of Taxation v Haass (1999) 91 FCR 132 Federal Commissioner of Taxation v Midland Railway Co of Western Australia Ltd (1952) 85 CLR 306 Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639 Federal Commissioner of Taxation v Myer Emporium Ltd (1987) 163 CLR 199 Federal Commissioner of Taxation v Payne (2001) 202 CLR 93 Federal Commissioner of Taxation v South Australian Battery Makers (1978) 140 CLR 645 Federal Commissioner of Taxation v Whitford's Beach Pty Ltd (1982) 150 CLR 355 Ferneyhough v Westpac Banking Corporation (unreported, Federal Court of Australia, 18 November 1991) Fletcher v Federal Commissioner of Taxation (1991) 173 CLR 1 GP International Pipecoaters Pty Ltd v Federal Commissioner of Taxation (1990) 170 CLR 124 Graham v Green (Inspector of Taxes) [1925] 2 KB 37 Hallstroms Pty Ltd v Federal Commissioner of Taxation (1946) 72 CLR 634 IEL Finance Ltd v Commissioner of Taxation (2010) 272 ALR 640 Kidston Goldmines Ltd v Commissioner of Taxation (1991) 30 FCR 77 Jones v Federal Commissioner of Taxation (1932) 2 ATD 16 Lamesa Holding BV v Commissioner of Taxation [1999] FCA 612 LNC (Wholesale) Pty Ltd v Collector of Customs (1988) 77 ALR 347 Lubidineuse v Bevanere Pty Ltd (1984) 3 FCR 1 Magna Alloys & Research Pty Ltd v Federal Commissioner of Taxation (1980) 33 ALR 213 National Australia Bank Ltd v Commissioner of Taxation (1997) 80 FCR 352 National Australia Bank Ltd v Meeke [2007] WASC 11 Paramedical Services Pty Ltd v Ambulance Service of New South Wales (2005) 217 ALR 502 Robb Evans of Robb Evans & Associates v European Bank Ltd [2009] NSWCA 67 Ronpibon Tin NL & Tongkah Compound NL v Federal Commissioner of Taxation (1949) 78 CLR 47 Spassked Pty Ltd v Commissioner of Taxation (2003) 136 FCR 441 Specialised Printing Equipment v de Vries [2003] NSWSC 1168 Spriggs v Federal Commissioner of Taxation (2009) 239 CLR 1 Sun Newspapers Ltd and Associated Newspapers Ltd v Federal Commissioner of Taxation (1938) 61 CLR 337 Tweddle v Commissioner of Taxation (1942) 180 CLR 1 Westfield Ltd v Federal Commissioner of Taxation (1991) 28 FCR 333 Western Gold Mines NL v Commissioner of Taxation (WA) (1938) 59 CLR 729 W Nevill & Co Ltd v Federal Commissioner of Taxation (1937) 56 CLR 290 Guy, A.F, Foreign Exchange Risk Management (1985) Australian Mining and Petroleum Law Association Yearbook 178-195 TR 2005/15: Income tax: tax consequences of financial contracts for differences (Commissioner of Taxation, 31 August 2005)