Amies v Commissioner of Taxation
Document type: Decision Impact Statement
Venue: Administrative Appeals Tribunal (2015/4708)
Judgment date: 2 October 2015
Date published: 12 November 2015

Summary of decision:
Outlines the ATO response to an Administrative Appeals Tribunal decision to set aside the Commissioner of Taxation's decision to refuse the issue of a departure authorisation certificate (DAC) to Ms Amies and substitute its decision to issue a DAC on condition of specified security being given to the Commissioner.

Overview of facts:
In February 2015, the Commissioner of Taxation made assessments and amended assessments of the taxable income of Ms Amies for the 2003-2007 income tax years. The primary tax, penalties and interest resulting from those assessments exceeded 3 million dollars. | The assessments were based on the Commissioner's contentions that Ms Amies was involved with a cross-jurisdictional network of companies and trusts located in tax havens to disguise her interest in certain funds, which were invested in Australian financial assets which yielded taxable income. | The Commissioner commenced recovery proceedings against Ms Amies in April 2015. In May 2015, Ms Amies objected against the assessments. | The Commissioner issued a departure prohibition order to Ms Amies on 1 June 2015 under section 14S of the Taxation Administration Act 1953 (Cth) (TAA), prohibiting her departure from Australia for a foreign country. | In July 2015, the Commissioner obtained interim freezing orders against the assets of Ms Amies and also disallowed Ms Amies' objection against her income tax assessments. Ms Amies requested the Commissioner to issue a DAC to allow her to travel in October 2015 to Italy to attend a friend's wedding. She also applied to the Administrative Appeals Tribunal for review of the objection decision in August 2015, and that review has been listed for hearing in February 2016. | The Commissioner made a decision refusing to grant the DAC in September 2015 after extensive negotiations concerning security under subparagraph 14U(1)(b)(i) of the TAA for Ms Amies return. | Ms Amies applied for a review of that decision. | Issues decided by the court | The Tribunal (Deputy President PE Hack SC) set aside the Commissioner's decision refusing the issue of the DAC and substituted its decision to issue a DAC upon the condition that Ms Amies gives security to the Commissioner in the amount of $200,000 and that she consent to the freezing orders continuing to have effect until the hearing and determination by the Tribunal of Ms Amies application for review. | Deputy President Hack concluded, on the basis of the facts before the Tribunal, that the risk that Ms Amies might not return to Australia was slight and that pursuant to subparagraph 14U(1)(b)(i) of the TAA he would require Ms Amies to give security in the amount of $200,000. He also stated: In the dealings between the parties to date, the Commissioner appears to have required security for the whole of the tax in dispute. That seems unrealistic to me - what is required is not security for the debt but security for Ms Amies' return to Australia. So much is accepted in the Commissioner's policy document, Practice Statement Law Administration 2011/18 at paragraph 157.. | The facts presented to the Tribunal by Ms Amies included her family, business and emotional ties in Australia. | Deputy President Hack also stated that in the event that Ms Amies was not able to give security in the terms proposed, he would not have been satisfied with a departure certificate being issued on humanitarian grounds.

Issues decided:
The Tribunal (Deputy President PE Hack SC) set aside the Commissioner's decision refusing the issue of the DAC and substituted its decision to issue a DAC upon the condition that Ms Amies gives security to the Commissioner in the amount of $200,000 and that she consent to the freezing orders continuing to have effect until the hearing and determination by the Tribunal of Ms Amies application for review. Deputy President Hack concluded, on the basis of the facts before the Tribunal, that the risk that Ms Amies might not return to Australia was slight and that pursuant to subparagraph 14U(1)(b)(i) of the TAA he would require Ms Amies to give security in the amount of $200,000. He also stated: In the dealings between the parties to date, the Commissioner appears to have required security for the whole of the tax in dispute. That seems unrealistic to me - what is required is not security for the debt but security for Ms Amies' return to Australia. So much is accepted in the Commissioner's policy document, Practice Statement Law Administration 2011/18 at paragraph 157.. The facts presented to the Tribunal by Ms Amies included her family, business and emotional ties in Australia. Deputy President Hack also stated that in the event that Ms Amies was not able to give security in the terms proposed, he would not have been satisfied with a departure certificate being issued on humanitarian grounds.

ATO view of decision:
The ATO accepts that the decision, decided on the basis of the facts presented to the Tribunal at the hearing, is in accordance with established principles and that it was open to the Tribunal to make the factual findings it ultimately made.

Administrative treatment:
Implications for impacted ATO precedential documents (Public Rulings, Determinations, ATO IDs) | Nil | Implications for impacted Law Administration Practice Statements | Nil

Legislative references: Taxation Administration Act 1953 (Cth) 14S 14U
Subject references: Tax administration Recovery of tax Departure prohibition & authorisation