Tax office appeals Vector's $53 million win on CBD tunnel
The Inland Revenue Department will appeal a High Court decison which found in favour of Vector over a $53 million payment relating to the Auckland electricity and gas network operator's access rights to its Auckland CBD tunnel.
Last month, Justice John Faire the High Court in Auckland's declared payments made by national grid operator Transpower in relation to the underground tunnel, known as NSTC, didn't constitute income and cancelled the tax department's assessment, according to the Aug. 29 judgment. IRD is appealing the decision, Vector said in a statement today.
The August judgement rejected the IRD's claim that 'other revenues' were intended to capture capital payments of this nature, and that "if Parliament intends to tax capital it must do so with clear language," the judgment said.
"The payments were of a once and for all nature producing advantages to Transpower which were enduring," the judgment said. "This factor clearly points toward the expenditure being capital in nature."
That means the section of the Income Tax Act 2007 the IRD was relying on didn't apply, a finding which "is enough to dispose of the case."
The judge reserved an order on costs to let the parties discuss the matter.
At the time of the judgement, Vector said the ruling meant the tax department will be required to refund $7.6 million of tax already paid, subject to any appeal process.
Shares of Vector rose 0.4 percent to $2.63, and have gained 2 percent this year.