Mylan Australia Holding is a subsidiary of the multinational pharmaceutical company Mylan Group. Mylan Australia Holding is the head of the Australian tax consolidated group, which includes its subsidiary Mylan Australia Pty. In 2007, Mylan Australia Pty acquired the shares of Alphapharm Pty Ltd and a substantial loan (A$923,205,336) was provided by a group company in Luxembourg to finance the acquisition. In subsequent years the interest expense was deducted from the taxable income of Mylan’s Australian tax group. The Australian Taxation Office (ATO) issued amended assessments to Mylan Australia Holding disallowing approximately AUD 589 million of interest deductions claimed for the 2007 to 2017 tax years. The ATO had initially pursued the structure as a transfer pricing issue, but ultimately argued that the deductions should be disallowed under the general anti-avoidance rule. Mylan Australia Holding appealed to the Federal Court. Judgment of the Court The Federal Court decided in favour of Mylan Australia Holding and set aside the amended assessment ... Read more

The Australian Tax Office (ATO) had determined that Minerva had received a “tax benefit” in connection with a “scheme” to which Part IVA – Australian GAAR – applied. Minerva appealed to the Federal Court, which upheld the assessment of the ATO. Mylan then appealed the decision to the Full Federal Court. Judgment of the Full Federal Court The Full Federal Court found in favour of Minerva. Excerpts “121 The s 177D factors are to be considered in light of the counterfactual or other possibilities and the outcomes resulting from the scheme. Part of the difficulty in the present case is that the same commercial outcome for the parties would not have been achieved by a distribution of income to the special unitholder as was achieved by the distribution of income to the ordinary unitholder, putting aside the Australian income tax consequences. Jupiter was indebted to LF and the distributions from MFGT enabled the repayment of that debt. Vesta increased its ... Read more

In the course of an audit a formal request to produce certain documents was issued to the multinational meat production group JBS by the Australian tax authorities. On behalf of its client, PwC claimed that the documents requested were subject to legal professional privilege (LPP), and therefore did not need to be produced. Thus, PwC declined to provide approximately 44,000 documents. The tax authorities disputed the LPP claims over approximately 15,500 documents. However, for the purposes of the trial, only 116 sample documents were selected by the partis and considered by the court. Judgement of the Federal Court The court found that legal professional privilege claims needed to be considered on a document-by-document basis. From the sample of documents selected by the parties, the court concluded that 49 were privileged; 6 were partly privileged; and 61 were not privileged. Excerpt “It is therefore necessary to consider, on a document-by-document basis, whether each Sample Document is subject to legal professional privilege ... Read more