PepsiCo and a broader approach to the characterisation of royalties
Published Date: 20 Jun 2024
In a significant decision, the Federal Court found that a component of payments made under exclusive bottling agreements between PepsiCo and Schweppes were “royalties” and subject to 5% withholding tax. The Federal Court’s approach to characterisation of those payments was to consider the terms of the agreements in their business and commercial context, placing no significance on how “royalty-free” payments were described by the parties. This approach appears to broaden the approach of earlier courts, where a much narrower focus on the rights and obligations of the parties under an agreement was determinative of the characterisation of payments made.
At the time of writing, PepsiCo’s appeal has been listed to commence on 8 May 2024.
In this session, we take a closer look at the approach of the primary judge and discuss PepsiCo’s appeal as it relates to the characterisation of the payments as royalties.
Individual Session
Details
- Published By: Daniel Mcinerney KC, Winnie Wong
- Published On:20 Jun 2024
- Took place at:Amora Hotel Jamison Sydney & Online
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