Billionaire Shahin family in ATO war over luxury cars including Bentleys, Rolls Royces and Ferraris
By Ben Butler,The Advertiser
4 July 2024
Forty luxury cars including Bentleys, Rolls Royces and Ferraris are at the centre of an escalating legal stoush between the taxman and the Shahin family, the billionaire founders of Smokemart and the OTR convenience store and petrol station chain.
The Australian Taxation Office claims a Shahin family company should pay fringe benefits tax on the use of the cars for four years by the three brothers who run the empire, Charlie, Sam and Yasser Shahin.
But the company, SEPL, claims the tax isn't payable because the brothers aren't employees, despite working up to 60 hours a week in the business.
The dispute has been running behind closed doors since 2021 but can now be revealed after the ATO last month went to court to appeal an Administrative Appeals Tribunal decision in favour of the Shahins.
In documents filed with the Federal Court, the ATO claims that SEPL began buying “numerous high performance vehicles and other luxury cars, including multiple Bentleys, Rolls Royces, Mercedes Benz, Ferraris, Aston Martins, McLarens and Porsches” in 2006.
The cars were picked by the Shahin brothers who “had exclusive use of these vehicles”, the ATO claims.
It told the court the brothers used the cars both in the business and for private purposes, and claimed tax deductions for business use, between 2016 and 2020. However, the ATO claims that SEPL, part of the family's Peregrine Corporation business empire, should have paid fringe benefits tax for the men's use of the cars.
The ATO has not disclosed how much it claims is owed.
The Shahin family are heavily involved in motorsport, with Sam Shahin driving a Porsche in international competition while Yasser Shahin won his class at historic French endurance race Le Mans this year.
Fringe benefits tax was introduced in 1986 by thentreasurer Paul Keating to tax benefits given to employees including long lunches, free flights, cars and low-interest loans. It is worked out using a formula based on the value of the benefit.
The Shahin brothers say the company doesn't have to pay the tax because, although they worked extremely hard running the business, which at the time owned as many as 160 petrol stations and 200 Smokemart outlets, they were not employees.
Their father, Fred Shahin, started the business with one petrol station after fleeing to Australia as a Palestinian refugee in 1948. Last year, the family sold the Smokemart and OTR businesses, reaping $1.2bn and catapulting the brothers into Australia's top 250 richest people.
The ATO dispute was heard by the AAT last year under pseudonyms, masking the identity of the brothers.
In evidence to the tribunal, Yasser Shahin - who was given the codename “Mr Smith” - said all three brothers “devote their whole life to the running of the business” and were “effectively on call 24 hours per day to run the business”.
“It's not like we worked halftime and spent the other halftime on a boat,” he told the tribunal. Dr Sam Shahin in his garage.
Politicians, police, public servants spy on family’s phones, leak suggests
In 2022, a NSW Department of Corrections staff member started an online chat with mSpy customer service. “Can i [sic] log into my partners [sic] device remotely or do I need to physically load into her phone,” he asked.
A minute later, a staff member cheerfully advised that they would need access to the device for just five minutes but then “all the data monitored will be available through your online possible account”, according to the company’s internal chat logs.
mSpy is a software company that has sold phone and computer monitoring and tracking tools known as “stalkerware” since 2010. A trove of mSpy customer data for users with Australian and New Zealand government email addresses shows how Australian state and local politicians, police, high-ranking members of government agencies, and ordinary public servants have used or intended to use this software.
