Hilton goes up against the ATO over $80m of allegedly unpaid tax

Superbly located in the hub of Sydney?s vibrant CBD, Hilton Sydney has magnificent views and convenient access to the city?s greatest attractions.
By James Harrison


The Australian arm of Hilton Worldwide has gone to battle with the Australian Tax Office (ATO) over allegations that it hasn’t paid over $80 million in taxes, penalties and interest.

The hotel brand launched legal action with the ATO in Federal Court to dispute the large sum.

The ATO believes that Hilton owes $51m in taxes over the sale of its Sydney property in 2015, according to the 2022 accounts for Hilton’s Australian business. The accounts show that the ATO is also looking for $13m in penalties and $15.7m in interest from the company, according to the Sydney Morning Herald. According to the hotel group’s accounts, it has already agreed to pay $26m to the ATO in response to the allegation.

Hilton confirmed that the dispute relates to a capital gain allegedly not recorded by the hotel group in 2015. The hotel group has been accused of using a business structure and scheme designed to avoid tax.

Hilton said in its appeal document: “The respondent erred in concluding that the purported scheme was entered into or carried out for the dominant purpose of obtaining a tax benefit because, on an objective assessment of all relevant circumstances, any person who entered into or carried out the purported scheme or any part of it, did so for the dominant purpose of achieving the applicant’s commercial objectives and further did so in a manner that was commercially preferable to the respondent’s alternative postulates.”

Hilton sold its 595-room Sydney property to the Chinese investment house Bright Ruby in May 2015 for $442m.

Hilton has continued management of the 579-room property, subject to a 50-year contract.

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