Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


DuluxGroup settles Alesco tax case on eve of court hearing

DuluxGroup settles Alesco tax case on eve of Supreme Court hearing

Feb. 17 (BusinessDesk) - DuluxGroup, the ASX-listed paint manufacturer, has settled a tax dispute with New Zealand’s Inland Revenue Department over subsidiary Alesco NZ’s use of optional convertible notes.

The terms of the settlement are confidential, though DuluxGroup expects it will be less than the $12.7 million provision in its accounts as at Sept. 30 last year, it said in a statement. The settlement comes before a three-day hearing was due to kick off tomorrow in New Zealand’s highest court.

Last year, the Supreme Court granted Alesco leave to appeal a March decision in the Court of Appeal which would see Alesco face an $8.6 million bill in back taxes and penalties.

The company used instruments known as optional convertible notes to fund the acquisitions because tax deductions on the New Zealand side of the Tasman weren't countered by an offsetting tax derived from income in Australia. The Inland Revenue Department contended the hybrid securities, which let companies juggle equity and debt to provide a tax advantage, were structured purely to minimise tax.

The thrust of Alesco’s appeal of a High Court judgment was that the Commissioner for Inland Revenue had originally okayed the use of the instruments, and that there was real commercial purpose in the transactions to buy two New Zealand businesses.

The Alesco decision has wider implications, with a raft of other companies facing similar proceedings, with some $300 million in tax and penalties at stake.

Among other Australasian corporates caught up are Qantas, Transfield, Telstra Corp, Toll Holdings, and Ironbridge, the former owners of Mediaworks, which runs the TV3 and RadioLive networks.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news