PepsiCo Inc. won its appeal in an Australian legal fight over whether it was liable to pay a royalty withholding tax designed to crack down on offshore transactions that multinational companies use to avoid taxes.
The judgment Wednesday could shake up the Australian Taxation Office’s use of the “diverted profits tax,” a 2017 measure that allows the government to levy a 40% tax rate on the amount of those profits. The tax is considered a powerful tool to shut down tax planning the government believes is used to dodge Australian taxes involving intellectual property, such as trademarks and patents.
Multinationals ...