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Full Federal Court dismisses Citigroup’s Pt IVA appeal


The recent judgment of the Full Court of the Federal Court in the Citigroup case is important from several points of view, notably, because it is the first to consider the amendments to Pt IVA of the Income Tax Assessment Act 1936 (Cth) which included the generation of foreign tax credits as a "tax benefit" susceptible to Pt IVA. It also confirms that, when considering whether Pt IVA can apply, it will be important to point to non-tax-related commercial benefits from a transaction to ensure that contemporaneous analysis and focus are on those aspects.

This article considers the issues raised on the taxpayer's appeal, including whether a "but for" test was applied in the Federal Court, the appropriateness of a post-tax cash flow negative analysis, and whether excess foreign tax credits had been generated, and discusses the response of the court to each of those issues.

Author profile

Joanne Dunne CTA
Photo of author, Joanne DUNNE Joanne is a lawyer from Melbourne. She was formerly a tax partner at law firms in both Australia and New Zealand. She has more than 25 years’ tax experience in general income tax, GST, international tax, and tax controversy. Joanne is a member of a wide range of professional organisations, including The Tax Institute’s Tax Disputes Committee, and until 2020 she represented The Tax Institute on the ATO’s Dispute Resolution Working Group. - Current at 11 November 2021
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