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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news