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Our tax litigation and dispute resolution practice is the largest of any law firm in Australia. We have an unrivalled depth of partner talent with some of Australia’s most technically capable tax lawyers working on the largest and most complex tax disputes, investigations, mediations and inquiries. Our lawyers are experts in tax advisory and litigation and as such there is no requirement for ‘double handling’ of matters. This provides a cost effective and streamlined matter management process for our clients.
We have developed a unique cross-practice team of specialised tax litigation and dispute resolution lawyers, with expertise across disputes in the areas of:
- Federal income tax, withholding tax and transfer pricing
- Fringe benefits tax and other employment-related taxes
- Federal indirect taxes such as GST, PRT, excise duty, customs duty
- State indirect taxes such as stamp duty, land tax and payroll tax.
Our team has strong working relationships with the Australian Taxation Office (ATO), the Australian Government Solicitor (AGS) the relevant tax authorities in each State and State Crown Solicitors. These relationships enable us to explore avenues for settlement throughout the course of disputes.
Tax litigation is an end-to-end process which requires careful and strategic planning and project management. This is the key to avoiding unnecessary costs, duplication of effort, and achieving the best result for our clients in the shortest possible time.
We have the expertise and resources to efficiently and effectively manage any taxation case, no matter the complexity, timescale or size.
Tax litigation requires close working relationships across the client - with the ability to interact with tax and legal managers, business lines and, importantly, with the accounting team. Our specialist tax litigators have worked within accounting firms and have accounting qualifications. We also have considerable experience working closely with external accounting advisers and accounting experts who may be required to provide expert accounting evidence.
Multinational enterprises involved in related-party transactions face the threat of double taxation and severe penalties for non-compliance with domestic and international transfer pricing regimes. Our tax litigation experts have experience in dealing with the complexities of transfer pricing audit defence, tax treaty issues and international tax dispute resolution. We specialise in resolving all types of issues confronted by multinational enterprises operating both within and outside the treaty network through our knowledge of the issues and competent authority processes. Our competent authority services include strategic planning, compliance and dispute resolution.
Tax litigation cannot be managed effectively without strong litigation support technology. We have committed substantial resources to developing database technology which is at the forefront of litigation practice.
Our commitment to the latest technology sets us apart from our competitors and provides our clients with a distinct advantage in the form of a more effective, efficient and inexpensive method of litigating tax disputes.
Our database management systems can also be used effectively in the “pre-litigation” review and audit stages to efficiently compile responses to the ATO and to appropriately identify and categorise privileged material.
We have significant experience in dealing with the ATO throughout audit and review processes, and attend and present at numerous GAAR Panel and other meetings with the ATO with our clients. We also maintain good relationships with the relevant tax authorities in each State, and State Crown Solicitor’s Offices.
This has extended to a strong working relationship with the AGS, which has enabled us to reach mutually acceptable settlements in a high number of cases.
We have an excellent working relationship with the senior tax bar, which enables our clients to access the best available advocates for their tax litigation.
The national aspect to our practice can be very valuable in particular cases, with the income tax jurisdiction in Australia being nationally based. As we have an extensive national tax litigation network in place, we are familiar with individual State practices and preferences, and can manage cases in any Australian jurisdiction. Importantly, we can also successfully match the national advantages of both the ATO and the AGS.
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BHP Billiton Tax Dispute
Advisor to BHP Billiton on one of Australia's biggest tax disputes. This matter relates to BHPB’s multi-faceted dispute with the ATO over the deductibility of expenditure and the financing costs of multi-billion dollar investments which were unsuccessful in earlier years. We acted for BHP Billiton, winning the case against the Commissioner of Taxation worth $2 billion (including all penalties), March 2009.
It is ground breaking litigation because it covers three of the most complex areas of tax law:
- project financing which the ATO wants to treat as limited recourse
- tax loss transfer rights
- deductions for in-house finance companies.
Lead tax partner: Michael Clough.
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Tax dispute - publicly offered products
This matter involved a dispute with the ATO over the taxation consequences arising from the public offer and issue of a structured product by an international bank and associated transactions involving a sell-down to a related entity. Following a lengthy audit by the ATO, Mallesons’ tax team achieved a full settlement with the ATO of the major substantive tax issues, without the need to resort to litigation.
Lead tax partners: John King and Judy Sullivan.
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AXA Health Tax Dispute
We acted for AXA Asia Pacific Holdings Ltd (AXA), a leading Australian insurance provider, in a tax dispute with the ATO over the tax consequences arising from the sale of its wholly-owned subsidiary, AXA Health Insurance Australia Pty Ltd, ultimately to an equity consortium composed of Macquarie Bank Limited and British United Provident Association Limited.
The matter was heard before Justice Jessup in March 2009.
The matter was significant as it involved the first substantive consideration by a court of the availability of scrip for scrip rollover relief from capital gains tax under subdivision 124-M of the Income Tax Assessment Act 1997.
Lead partner: Phillip Davies.
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NMUK Tax Dispute
We acted for National Mutual Life Association of Australasia Limited (NMLA) in a matter that involved a dispute with the ATO over whether or not a non-scrip capital contribution to a wholly-owned subsidiary of NMUK Limited, an entity in which NMLA was a shareholder, could be included in the cost base of the shares for capital gains tax purposes when NMLA subsequently disposed of them. The inclusion was sought on the basis that the contribution was capital expenditure "reflected in the state or nature" of the shares.
We were successful for NMLA in the Full Federal Court of Australia. The matter was heard in May 2009 before Justices Finn, Perram and Sundberg.
Lead partner: Phillip Davies.
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Australand Wholesale Property Trust
We acted for Australand in a Supreme Court appeal from a decision made by the Victorian Civil and Administrative Tribunal relating to whether the landrich duty provisions under the Duties Act 2000 applied in the circumstances to the acquisition of certain units in two trusts. This involved an analysis of the Duties Act provisions prior to some major legislative amendments and the impact of transitional provisions arising from those amendments to the transactions in question.
In the major matter, Mandie J in the Supreme Court of Victoria found in favour of Australand in the major matter but found against Australand in the minor matter.
Lead partner: Frank Brody.
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Telstra stamp duty dispute
We acted for Telstra in challenging the NSW Commissioner’s assessment of liability to duty on rental income in relation to the hire by Telstra of telephone handsets.
The NSW Court of Appeal was unanimous in finding on behalf of Telstra that there was no liability, and the High Court refused the Commissioner special leave to appeal.
Lead partner: Peter Fogarty.
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Caltex: Excise duty dispute
We acted for Caltex in challenging an assessment of excise duty in relation to certain by-product created within the Refinery and used as a heating source by Caltex in the refinery process. The assessment was for approximately $50m.
Sundberg J in the Federal Court held the assessment was not payable.
Lead partner: Peter Fogarty.
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Stamford Group: GST dispute
We acted for Gloxinia, a subsidiary of the Singapore based Stamford Hotels Group. The case involved the interpretation of the important subdivision in the GST Act dealing with sales of certain residential premises being subject to GST; the relevant definitions of new residential premises and the interaction of that concept with grants of long term leases. Emmett J in the Federal Court found in favour of Gloxinia. The ATO has appealed.
Lead partner: Peter Fogarty