In a development of interest for tax practitioners, yesterday the High Court granted special leave in Commissioner of Taxation v PepsiCo Inc.
The case concerns the tax treatment of bottling agreements between Schweppes Australia and PepsiCo, which included rights to use PepsiCo trademarks, without express provisions for royalty payments.
The Commissioner has asked the Court to decide whether a foreign corporation “can licence its valuable intellectual property to an Australian resident without paying royalty withholding tax.” The Commissioner expects that question to impact on a number “of high value tax disputes.”
Kristen Deards SC and Ryan May of Banco Chambers are appearing for the Commissioner of Taxation, together with Tamara Phillips and David Lewis of 6 Selborne.
