Mylan Australia Holding Pty Ltd v Commissioner of Taxation (No 2) [2024] FCA 253

FEDERAL COURT OF AUSTRALIA

Mylan Australia Holding Pty Ltd v Commissioner of Taxation (No 2) [2024] FCA 253 File number(s): VID 770 of 2021 VID 526 of 2022

Judgment of: BUTTON J

Date of judgment: 20 March 2024

Catchwords: TAXATION – income tax – interest deductions – schemes to which Pt IVA of the Income Tax Assessment Act 1936 (Cth) applies – where Applicant's ultimate parent company acquired global pharmaceutical business – where Applicant is the head of a tax consolidated group of entities incorporated in Australia to acquire the Australian target – where Australian acquirer (MAPL) capitalised with a mix of intragroup debt and equity – where Applicant claimed deductions for interest expenses incurred by MAPL under intercompany promissory notes – where Commissioner of Taxation issued determinations under s 177F disallowing the deductions and consequential carry forward losses – whether Applicant obtained a tax benefit in connection with a scheme to which Pt IVA applies – whether tax benefit required to be anticipated at time scheme entered into – where, objectively assessed, the deductions allowable under the preferred counterfactual would have been less than the deductions obtained under the schemes – where the Applicant obtained a tax benefit within the meaning of s 177C – whether the scheme was entered into or carried out for the dominant purpose of obtaining that tax benefit – consideration of the factors set out in s 177D(b) – where obtaining a tax benefit was not the ruling, prevailing, or most influential purpose – where the assessments issued by the Commissioner of Taxation were excessive TAXATION – validity of determinations and assessments – whether Court permitted to remit the matter to the Commissioner for fresh determinations based on the Court's findings – whether assessments consistent in all material respects with the postulate upon which underlying determinations made – application of the decision in Channel Pastoral Holdings v Federal Commissioner of Taxation (2015) 232 FCR 162; [2015] FCAFC 57 – points not necessary to be decided