The taxpayer has discontinued its appeal to the Full Federal Court against the decision in VN Railway Pty Ltd & Anor v FCT [2013] FCA 265.

In that case, the Federal Court upheld a 75% tax shortfall penalty imposed on the trustee of a family trust operating independent supermarkets after ruling that the taxpayer had not been denied procedural fairness and that it was open for the AAT to find the taxpayer had “intentionally disregarded” its tax obligations under s 226J of the ITAA 1936. The Court also upheld the Commissioner’s decision to disallow deductions in relation to superannuation payments for family members of the trust because it considered they were not “employees” for the purposes of former s 82AAC of the ITAA 1936. The ATO has also issued a Decision Impact Statement on the case – see below.

[LTN 239, 10/12/13]

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