Virgin heads to court chasing $900,000 tax refund

“The crew member’s primary place of employment was the home base airport terminal, or alternatively, the respective airport terminals at which the crew member performed duties,” the ATO appeal statement said.

This appeal continues Virgin’s chequered history with the ATO – corporate tax data from financial 2014 to financial 2018 show the carrier paid none on its $23.5 billion of income during this time.

Virgin paid $880,000 of tax on its $6.1 billion income in financial year 2019.

Virgin’s now-defunct budget subsidiary, Tigerair Australia, also paid zero income tax for the three financial years it appeared in these statistics.

“The group has historically paid all fringe benefits tax amounts in dispute and is seeking the courts’ clarification on its entitlement to refunds of those amounts paid,” a Virgin spokeswoman said.

She said the airline was committed to paying the right amount of tax in Australia and abroad.

“In every transaction undertaken by the Virgin Australia Group, whether it be the carriage of passengers, purchase of goods or services or employment of staff, the Virgin Australia Group pays, collects or remits numerous forms of taxes in line with legislative requirements,” the spokeswoman said.

“Due to high levels of investment in long term assets such as aircraft, as well as the historical economic performance of the Virgin Australia Group which has seen the Group report net losses, the group is currently not required to pay federal income tax due to having prior-year tax losses.”

Virgin handed over $1.8 million to the ATO between 2013 and 2016 for providing the staff of its mainline brand and regional arm with the car parking spaces.

The carrier lodged objections to this in 2017, 2018, 2019 and 2020 with requests for refunds totalling around $893,000; however, the ATO rejected these appeals in July due to its uncertainty around the grounds for them.

“The respondent [ATO] is not aware of the specific methodology applied by the applicants [Virgin], or the evidence relied upon, to support their calculation of the taxable values in dispute,” the ATO appeal statement said.

Federal Court Justice John Griffiths will hear this matter on April 26.

Virgin Australia, under substantial pressure because of the COVID-19 pandemic, tipped into voluntary administration earlier this year to be picked up US private equity firm Bain Capital.

Bain has installed former Jetstar boss Jayne Hrdlicka to lead the airline, and yesterday she poached Qantas’ chief operating officer.