Wednesday, July 18, 2012

News Limited scores win against Tax Office

News Limited could be eligible for up to $2 billion in tax deductions related to currency losses incurred on international loans.

Thirty subsidiaries of News appealed a decision of the Australian Tax Office to refuse the deductions.

The losses stemmed from a series of loans to related overseas companies in the late-1980s, and were claimed between 2000 and 2002 during a debt transfer from a US arm of the company.

The ATO had argued the transfer of the loans did not constitute an event to trigger the foreign currency losses, and that no deductions should be available.

However, the Federal Court found the transfer of the loans did result in a foreign currency loss to the plaintiffs.

Had News Limited fully succeeded in all its claims it could have expected a tax refund of around $615 million plus interest.

However, while Justice Perram ruled that the tax assessments were excessive, he also made some factual findings in favour of the ATO that are likely to reduce the total tax refund.

Justice Perram said that meant he is not in a position to assess the correct amount owed to News.

Instead, he has ordered the ATO to reassess the companies' tax liabilities including the deductions from the foreign currency losses.

The ATO has also been ordered to pay court costs, however it is not clear yet whether it will appeal Justice Perram's decision to the full bench of the Federal Court. 17 Jul 2012

News Limited untochable by law.

Phone hacking scandal - untouched.

Tax bill - untouched.

It is good to know that the brotherhood on one's side.

Now the ATO (Australian Tax Office) will go on a rampage to obtain taxes from the masses to cover the financial black hole created by Rupert Murdoch.

Some companies are allowed to get away with tax fraud whilst others are not.

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