Australia—Dentons, the world’s largest global firm, has successfully acted for the taxpayer, S.N.A Group Pty Ltd, in a dispute in Federal Court of Australia with the Commissioner of Taxation: S.N.A Group Pty Ltd v Commissioner of Taxation [2025] FCA 240. The legal team, led by Corporate Tax Partner Damien Bourke, along with Senior Associate Natalie Wissa and Lawyer Ryan Steele, achieved a significant ruling in favour of S.N.A Group Pty Ltd.

S.N.A Group Pty Ltd appealed against an objection decision issued by the Commissioner of Taxation disallowing 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). The Court ultimately ruled in favour of S.N.A Group Pty Ltd, setting aside the objection decision.

The Taxpayers argued that these service fees were incurred in the ordinary course of business, reflected genuine commercial arrangements, and were supported by longstanding professional advice. The Commissioner challenged this, questioning whether the fees were genuinely incurred and of a reasonable rate.

The ruling is significant in that it underscores the Court’s recognition of the difficulties faced by small to medium businesses when they outgrow their own resources, particularly regarding the realities of informal record keeping and accounting practices. It also highlights the potential harm to these businesses if the Commissioner of Taxation fails to acknowledge the commercial realities of informal practices.

In addition to the primary proceedings, Dentons successfully argued for costs to be awarded to S.N.A Group, on an indemnity basis from December 2023. This decision emphasises 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.

Lead Partner Damien Bourke stated, "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. 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 national Tax team has previously secured a separate Federal Court victory in Toowoomba Regional Council v Commissioner of Taxation [2025] FCA 161, reinforcing the team’s ability to run a case from Australian Tax Office review all the way through to litigation and costs.

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