Sladen Snippet - Update on Satyam – scope of double tax treaty – special leave denied

We reported on the Full Federal Court decision of Satyam Computer Services Limited v CoT (2018) [2018] FCAFC 172 (Satyam) here.

In that case, the taxpayer sought to challenge, unsuccessfully, that Article 23 of the tax treaty between India and Australia did not create a tax liability where a tax liability would not have arisen under the domestic law of Australia.

The question in dispute was whether payments received from Australian clients for services provided by a computer company resident in India (Satyam Computer Services Ltd) had an “Australian source” when employees in India performed the services.  

The Full Federal Court held that payments received for services provided by employees located in India to Australian customers were taken to have an Australian source by reason of the treaty sourcing rule and were therefore assessable in Australia.

The taxpayer recently unsuccessfully sought special leave to have the case heard by the High Court. This means that the decision of the Full Federal Court stands.

To discuss or for further information please contact:

Kelvin Yuen
Lawyer
Sladen Legal
T +61 3 9611 0177
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: kyuen@sladen.com.au

Neil Brydges
Principal Lawyer | Accredited Specialist in Tax Law
Sladen Legal
M +61 407 821 157 | T +61 3 9611 0176
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia  
E: nbrydges@sladen.com.au

Annabell Rehmer
Law Clerk
Sladen Legal
T +61 3 9611 0196
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: arehmer@sladen.com.au