Alcoa Win in Australia Tax Case Shows Legal Strategy Matters (1)

The Australian tax authority’s decision not to appeal its loss against Alcoa Corp. demonstrates the importance of companies’ ensuring that their transfer pricing positions can stand up to possible court challenges, according to practitioners.

The agency confirmed Tuesday that it wouldn’t appeal a recent ruling clearing a subsidiary of the aluminum producer of claims it owed A$214 million ($138 million) in taxes on alumina sales to a government-controlled smelter in Bahrain.

Johnson Winter Slattery partner Annemarie Wilmore said the Australian Taxation Office’s choice not to appeal was initially surprising but made sense in light of the heavy criticism the judge ...