Singtel Loses Landmark Australian Tax Case

Australia on Friday won a landmark court ruling against Singapore Telecommunications, a victory in the country’s battle against tax avoidance by multinational companies through cross-border financing arrangements, Bloomberg News reported. The Federal Court of Australia on Friday dismissed the company’s appeal of a tax assessment related to the acquisition financing of Singtel Optus in 2001. Transactions between two wholly owned SingTel units “differed from those which might be expected to operate between independent enterprises dealing wholly independently with one another,” Judge Mark Kranz Moshinsky wrote for the court. Tax experts warned in the aftermath of the decision that multinationals should expect scrutiny on intra-group financing that doesn’t appear to have taken place at arm’s length—as if it were done between two unrelated parties. Read more.