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

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news