Singapore Telecom Australia Investments Pty Ltd v Commissioner of Taxation [2021] FCA 1597

FEDERAL COURT OF AUSTRALIA Singapore Telecom Australia Investments Pty Ltd v Commissioner of Taxation [2021] FCA 1597 File number: VID 1231 of 2019

Judgment of: MOSHINSKY J

Date of judgment: 17 December 2021

Catchwords: TAXATION – transfer pricing – interest deductions – where the applicant was resident in Australia – where the applicant entered into a loan note issuance agreement (the LNIA) with a company (the subscriber) that was resident in Singapore – where the applicant and the subscriber were ultimately 100% owned by the same company – where the applicant issued loan notes totalling approximately $5.2 billion to the subscriber – where the applicant and the subscriber amended the terms of the LNIA on three occasions – where the first amendment and the second amendment were expressed to have effect as from the date when the LNIA was originally entered into – where the applicable rate under the LNIA as amended by the third amendment was 13.2575% – where the Commissioner made determinations under the transfer pricing provisions the effect of which was to deny interest deductions totalling approximately $894 million in respect of four years of income – whether conditions operated between the applicant and the subscriber in their commercial or financial relations which differed from those which might be expected to operate between independent enterprises dealing wholly independently with one another – whether, but for any such conditions, an amount of profits might have been expected to accrue to the applicant and, by reason of those conditions, the amount of profits has not so accrued

Legislation: Income Tax Assessment Act 1936 (Cth), ss 136AA, 136AC, 136AD Income Tax Assessment Act 1997 (Cth), ss 815-5, 815-10, 815-15, 815-20, 815-30, 815-35, 815-40 Income Tax (Transitional Provisions) Act 1997 (Cth), ss 815-1, 815-5, 815-15 Taxation Administration Act 1953 (Cth), s 14ZZO Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Act 2013 (Cth) Tax Laws Amendment (Cross-Border Transfer Pricing) Act (No 1) 2012 (Cth)