Q3

Reiss & Co (Nigeria) Ltd ("RCN") was a Nigerian subsidiary of a Dutch company Reiss & Co Ltd. RCN found customers for Reiss & Co Ltd in Nigeria and forwarded to Reiss & Co Ltd in Amsterdam those customers' offers to purchase goods. Reiss & Co Ltd then carried out in Amsterdam all subsequent negotiations and transactions directly with the customers. Reiss & Co Ltd made a profit on the transactions of 14% of the sale price for each transaction before Reiss & Co Ltd paid RCN 7% of the sale price for RCN's services under an agreement made in Amsterdam. RCN reported to the Nigerian Inland Revenue that RCN's income was 7% of the sale prices. However, the Nigerian Inland Revenue assessed RCN for tax on the entire profit made by Reiss & Co Ltd, ie 14% the sale prices. This tax assessment was made on the ground that RCN's profits could not be disentangled from those of Reiss & Co Ltd. Is the Nigerian Inland Revenue correct in assessing RCN on the entire profit of 14% of the sale prices?.

Determining whether a "place of abode" outside Australia is "permanent" "Place of abode" outside Australia "Place of abode" is not defined in the Income Tax Assessment Acts. R v Hammond (1852) ER 1447 at 1480: "A man's residence, where he lives with his family and sleeps at night, is always his place of abode." In Harding v FCT [2019] FCFCA 29 the Full Federal Court held that "place of abode" refers not only to a dwelling but can also refer to a country. Place of abode is "permanent" "Permanent" is also not defined in the in the Income Tax Assessment Acts. The Macquarie Dictionary: "lasting ... indefinitely; remaining unchanged; not temporary;" FCT v Applegate 79 ATC 4307 Held: Whether a place of abode is "permanent" is a question of fact. Also, the word "permanent" does not have its ordinary meaning of "everlasting" or "forever". But it must be contrasted with "temporary or transitory". A "permanent" place of abode therefore does not have to be everlasting, but it must be more than a temporary or transitory place of abode. Relevant factors to determine place of abode is "permanent" Intention as to length of stay outside Australia Actual length of stay outside Australia Abandonment of "place of abode" in Australia Acquisition of "place of abode" outside Australia Intention to make that "place of abode" home Nature and quality of use made of that "place of abode" Duration and continuity of presence in the place outside Australia "Durability of association" (ties) with that place Some factors may point in one direction and some in the other. The relevant factors must weighed up and balanced. In this process, the weight of each factor may vary from case to case and some factors may dominate others depending on the circumstances. Ultimately, the outcome may therefore turn on questions of degree. Importantly, no single factor is always decisive in every case