Global Daily Tax News, Pepsi To Appeal Australian Court Ruling In Landmark DPT Case, (Jan 25, 2024)

PepsiCo has filed a Notice of Appeal against the Federal Court's ruling in PepsiCo, Inc. v. Commissioner of Taxation.

Although the full judgment in the original case is subject to confidentiality orders, the Australian Taxation Office earlier said the ruling had confirmed that Pepsi is liable for royalty withholding tax in Australia and, in the alternative, diverted profits tax would apply.

In response to the initial ruling, the agency had said the case is the "first time a Court has considered the diverted profits tax." It noted that the Tax Avoidance Taskforce has for a number of years been targeting arrangements where royalty withholding tax has not been paid because payments have been mischaracterized, particularly payments for the use of intangible assets, such as trademarks.