PepsiCo Win Sets Back Australia Crackdown on Tax Dodges (1)

PepsiCo Inc.'s victory in its long-running Australian tax dispute frustrates the country’s attempts to claw back billions of dollars it claims are going unpaid by companies with complex cross-border arrangements.

Wednesday’s Pepsi decision by the country’s highest court sends the agency back to the drawing board on a key tool it hoped would help slam the door on tax avoidance: a controversial draft ruling on the tax treatment of royalties in software sales.

The court decision could also offer taxpayers some insight on how to defend against the 40% diverted profits tax that the Australian Taxation Office sought to apply, ...