PepsiCo in the High Court of Australia: Last Drinks for the Commissioner of Taxation

On 13 August 2025, the High Court of Australia ruled 4:3 for PepsiCo, holding that payments to an unrelated distributor contained no embedded royalties and that no income was “derived” for withholding tax purposes. In Australia’s first diverted profits tax case, the court also found no tax benefit, with significant implications for multinationals and the Australian Taxation Office’s interpretive approach.