Glencore faces uphill battle with ATO over Paradise Papers material

Glencore will need to prove the “dominant purpose” for the discussions on a Glencore restructure was not illegal, which lawyers speaking on background on Tuesday said should not be difficult.

A more difficult hurdle could be a 2015 Federal Court decision, Commissioner of Taxation v Donoghue, which found the Commissioner had significant latitude when conducting investigations under section 166 of the Tax Act.

Miner to challenge ‘statutory powers’

In Donoghue, Justice Susan Kenny and Nye Perram said section 166 “not only permits but requires the commissioner to act upon the information which he has in his possession regardless of how he came to have it”.

The court said the Commissioner was obliged to use the information “even if he knows it is privileged”, but Glencore says it will “challenge that construction of the Commissioner’s statutory powers”.

The case will also be closely watched

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