Chinese-owned Van Dairy appeal court ruling over $20m stamp duty tax bill

A Chinese dairy company owner is appealing a court ruling over a $20m stamp duty tax bill. Here’s what the company’s defence says about the complex company structure.

Van Diemen's Land Company’s historic property Woolnorth, is the biggest dairy farm in Australia.

Foreign-owned companies are fighting a tax bill of over $20m, appealing a Magistrates Court decision over stamp duty which followed the 2016 sale of a Woolnorth dairy property.

Chinese dairy giant Van Dairy purchased the 143,500 hectare northwest Tasmanian dairy in 2016 for $280m.

Van Dairy’s owner Xianfeng Lu then paid $8m in stamp duty.

However, a 2024 Hobart Magistrates Court decision ruled that due to two transfers of rights in relation to the dairy to other entities in which Mr Lu had an interest, Mr Lu through Van Dairy instead owed the State Revenue Office a further $20m on the Woolnorth sale.

Northwest Coast property Woolnorth, the temporary cell grazing fence

However, Mr Lu’s defence Anthony Young KC argued in the Supreme Court of Tasmania on Thursday that the State Revenue’s Commissioner made a “series of novel assertions in the oral submissions” of his original findings into the purchase of Woolnorth and from this, a Hobart Magistrate had made erroneous decisions on the stamp duty.

On the first day of a two-day hearing, Acting Justice Shane Marshall heard from Mr Young and lawyers for companies Van Dairy and Ningbo Kaixin Investment Co, as well as the State Revenue Commissioner’s senior counsel Phillip Jackson.

Mr Young stated the land title for Woolnorth was held by Van Dairy before being transferred to Mr Lu’s other company Moon Lake Investments, of which he is sole owner.

The State Revenue Commissioner then alleges that Mr Lu attempted to transfer shares of Moon Lake to Ningbo Kaixin Investment Co., another of Mr Lu’s investment companies.

Each transfer of the title and shares attracted stamp duty charges, which State Revenue calculated as over $20m.

Xianfeng Lu at Woolnorth. The sole owner of Moon Lake Investments is trying to buy the historic VDL Company.

Mr Young stated there were five grounds of appeal to the Magistrates Court decision, including there was no agreement for the sale of land properly made and the magistrate failed in identifying Moon Lake as a “land-rich private corporation” or that more than 60 per cent of the company’s assets were land.

He also stated there was no stamped or signed transfer of shares notice for Woolnorth and even if transferred, would not equate to a change in economic ownership as all companies were owned by Mr Lu.

Parties will return to the Supreme Court on Friday for further arguments.

Originally published as Chinese-owned Van Dairy appeal court ruling over $20m stamp duty tax bill