The High Court has partly granted a Revenue Commissioners application to amend the legal questions in an appeal concerning Getty Images International ULC’s treatment of foreign royalty withholding tax.
Getty licenses digital media to customers in more than 100 jurisdictions. Customers in some countries deduct royalty withholding tax, or RWHT, before paying Getty. For the financial years 2015, 2017 and 2018, Getty treated that foreign tax as a deductible trading expense.
Revenue disputed that treatment and issued determinations concerning 2015 and 2018. Getty appealed to the Tax Appeals Commission. Following a three-day hearing in February 2023, the Commissioner found in Getty’s favour, deciding that the foreign RWHT could be deducted under section 81 of the Taxes Consolidation Act 1997.
Revenue then required the Commissioner to state a case to the High Court on points of law. The present judgment did not decide the underlying tax dispute. Instead, it dealt with Revenue’s contention that the questions contained in the final case stated did not fully reflect the grounds it had originally identified.
Mr Justice Rory Mulcahy rejected Revenue’s attempt to alter two existing questions concerning other statutory tax-relief provisions. He held that the Commissioner was entitled to reformulate questions for clarity and to consider submissions from Getty when drafting the case stated.
The court also refused two proposed questions challenging factual findings. One concerned Getty’s inability to claim other tax relief and was already adequately covered by existing legal questions. Another challenged a supposed finding that withholding tax was a cost for all intellectual-property licensors, but the court found that the Commissioner had not actually made that finding.
However, Mulcahy J. allowed a third question asking whether there was evidence for the finding that Getty could not trade in jurisdictions imposing RWHT without incurring it. That issue sufficiently reflected Revenue’s original appeal notice.
Relevant transcript extracts may therefore be required. If the parties cannot agree them, the case stated will return to the Tax Appeals Commissioner to identify the necessary portions.