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

 


Michael Hill reaches A$6M settlement with tax office

Michael Hill reaches A$6M settlement with Australian Tax Office over 2008 IP transfer

April 1 (BusinessDesk) - Michael Hill International, the jewellery chain that bears the name of its founder, has reached an A$6 million settlement with the Australian Tax Office over the 2008 transfer of intellectual property to an Australian subsidiary.

The ATO had questioned the value the retailer had attributed to the IP, on which it determined the level of its tax deductions. Brisbane-based Michael Hill had put a $274 million value on the IP, generating a deferred tax asset of $50.2 million. The ATO said “significantly lower” deductions were available, based on its own valuation.

The company’s own valuation was based on the assumed levels of franchise fee income generated within the group by licensing its IP to its retail subsidiaries in Australia and New Zealand, it said.

The settlement “is a satisfactory and pragmatic outcome,” chairman Michael Hill said in a statement. “It confirms and leaves in place the company’s original valuation and also leaves in place the availability of the deferred tax asset of NZ$50,197,000.”

The tax issues arose from the company’s decision in 2008 to move more of its business to Australia, including its head office, in a transaction where Australian subsidiary, Michael Hill Franchise Pty, bought Michael Hill Jeweller System for NZ$293 million. At the time, profits were being squeezed by tight retail margins and it was looking for ways to improve its performance.

Talks with the Inland Revenue Department on the same issue are ongoing, it said today.

Shares of Michael Hill have declined 1.5 percent on the NZX in the past 12 months, while the NZX 50 Index gained about 17 percent. The shares are rated a ‘buy’ based on the consensus of six analysts polled by Reuters, with a median price target of $2.79.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

The Nation: Call For Cross-Party Auckland Housing Plan

Penny Hulse calls for cross-party accord on Auckland housing because “it’s too important to score political points on”. More>>

ALSO:

Flu Season: Overcoming Vaccination Reluctance

While research shows that 40% of New Zealand businesses offer free or subsidised flu vaccinations to employees this time of year, HR professionals say persuading staff to participate is the biggest challenge. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news