Tax treaty between Australia and United States – Australia's Federal Court rejects tax treaty override

The Federal Court of Australia on 19 April 2007 handed down its decision in GE Capital Finance Pty Ltd v Commissioner of Taxation [2007] FCA 558 rejecting the Commissioner's contentions that a tax treaty may be overridden by the Act which enacts that treaty.

The case involved a unit trust, resident in Australia by virtue of the trustee being resident in Australia, deriving interest income from sources in Australia as well as carrying on a business in A…