Apple Inc

The parties to this proceeding were Apple Inc. and the Commissioner of Taxation. The dispute concerned the Commissioner's assessment of additional income tax against Apple Inc. for the 2008 to 2011 income years, arising from the Commissioner's view that Apple Inc. had failed to adequately disclose its international tax affairs. The matter was heard in the Federal Court of Australia.

The primary legal issue before the Court was whether Apple Inc. had complied with its obligations under section 262A of the *Income Tax Assessment Act 1936* (Cth) to keep and retain sufficient records to enable an assessment of its income tax liability to be made. Specifically, the Court was required to determine if the records retained by Apple Inc. were sufficient to allow for the ascertainment of the assessable income and the deductions allowable to the company for the relevant income years, particularly in relation to its international related-party dealings.

Justice Thompson considered the nature of the records required by section 262A, noting that they must be sufficient to enable an assessment to be made, not merely to facilitate an audit. His Honour found that Apple Inc. had failed to retain records that adequately explained the nature and terms of its international related-party transactions, including the pricing of goods and services exchanged between its Australian entity and its overseas related entities. The Court applied the principles established in cases concerning the adequacy of record-keeping, emphasizing the need for records that provide a clear and comprehensive account of the company's financial activities relevant to its tax liabilities.

The Court ordered that the Commissioner's amended assessments for the 2008 to 2011 income years be affirmed.