Lead partner says the victory was not just for S.N.A Group but for small businesses in Australia
S.N.A Group Pty Ltd has beaten the taxation commissioner in Federal Court, with a team from Dentons helping the company to successfully appeal an objection decision by the commissioner.
The court nullified the objection decision, which had prohibited the deduction of inter-entity service fees paid for the use of Intellectual Property, Rent Rolls and Human Capital under section 8-1 of the Income Tax Assessment Act 1997 (Cth).
In S.N.A Group Pty Ltd v Commissioner of Taxation [2025] FCA 240, S.N.A Group claimed that the service fees were incurred “in the ordinary course of business, reflected genuine commercial arrangements, and were supported by longstanding professional advice”, according to a Dentons press release. However, the taxation commissioner questioned the genuineness of the process by which the fees were incurred as well as whether they were of reasonable rate.
The court ruled against the objection decision and awarded costs to S.N.A Group on an indemnity basis from December 2023.
Dentons said that the court’s judgment highlighted its understanding of the challenges faced by SMEs that “outgrow their own resources, particularly regarding the realities of informal record keeping and accounting practices”. The firm added that the taxation commissioner’s lack of acknowledgment of informal practices’ commercial realities could potentially harm businesses.
“This win was not just for our clients – it was for small businesses across the nation. A reminder of the unrealistic expectations and immense burden for the keeping of records by taxpayers”, lead partner Damien Bourke said. “To quote his Honour – ‘great injustices can be visited upon those in small business….if the Commissioner does not bring to bear at the audit stage an understanding grounded in the realities of commerce’.”
Dentons said that the court’s judgment also drove home the importance of “making genuine offers to settle, referencing the principles established in the Commissioner of Taxation v Clarke (No 2) [2011] FCAFC 140 and JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 95”.
Bourke assisted S.N.A Group together with a team that included senior associate Natalie Wissa and lawyer Ryan Steele.
