Federal Court of Australia rules on tax implications of payment by an Australian entity (a media company that operates commercial television stations) to International Olympic Committee (‘IOC’), Switzerland under the ‘signal utilisation deed’ (‘SUD’) for use of digital signal in connection with exclusive broadcasting of Olympic Games in Australia, holds that such payment not ‘royalty’ under Article 12 of Australia-Switzerland tax treaty; Australian entity was granted exclusive broadcasting rights for the Olympic games in Australia pursuant to agreement with IOC and in relation thereto, Australian entity was allowed access to ‘use’ of a signal (i.e. ITVR Signal) for live television broadcasts in Australia under the SUD; Australian Court rules that since no picture, image or sound could be recorded or permanently stored in the ITVR Signal and that ITVR Signal was not tangible and did not give physical form to an image or sound, no cinematograph film was made in which copyright can subsist, further “There was no technology that allowed the information transmitted by the ITVR Signal to be reproduced”; Rejects Revenue’s submission that the disputed payment was a royalty because it was made for the broadcast copyright that came into existence when taxpayer broadcast the Olympic Games; Further observes that the payment was “for the ITVR Signal for use in connection with exclusive Australian Broadcasting” and was not for any forbearance in respect of the use of any relevant property or right belonging to the IOC or any other relevant entity, concludes that payment was not for – use of any copyright/future copyright/ other like property or right/ use of right within class of IP rights
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