The Financial Times reported (17 February 2014) that Rupert Murdoch’s News Corp has been paid $882m by Australia’s tax authorities, following its victory in a legal battle over A$2bn in foreign exchanges losses that dates back to 1989.
The case comes amid a lively public debate in Australia on the level of tax paid by companies. G20 finance ministers will gather in Sydney this week to discuss global efforts to tackle tax avoidance. ‘This tax deduction is such a huge number it will refocus attention on the amount of tax that multinationals and large companies are paying in Australia,’ said Louise Boyce, tax counsel at Sydney-based law firm Squire Sanders.
The Australian Tax Office (ATO) declined to comment on the deduction, which was noted in financial accounts filed by News Corp this month in the US as payment from a ‘foreign tax authority’.
The payment to News Corp stems from the company’s victory in a long-running legal case over its entitlement to claim tax deductions in Australia on more than $2bn in foreign exchange losses that it incurred during an intra-group restructuring in 1989.
In a July 2012 ruling, Federal Court Justice Nye Perram ruled that the currency exchanges loss was deductible under the Australian tax code, rejecting the arguments of the Australian tax office.
The losses resulted when News Ltd, which in 1989 was the chief holding, management and operating company for the group, sold its interests in Hong Kong and Bermuda-based subsidiaries to other companies in the group to reduce intra-group debt. At the time, News Ltd had depleted its capital position following foreign expansion, and management felt that a restructuring should take place to bolster its accounts.
The Australian Financial Review reported on Monday that the tax office decided not to appeal against a ruling handed down by the Federal Court of Appeal in favour of News Corp. This decision took place against the backdrop of an acrimonious election campaign, which saw News Corp’s Australian newspapers heavily criticise the Labor government of Kevin Rudd, said the newspaper. The ATO on Monday said it had followed ‘published process’ when deciding on all appeals. ‘All decisions on whether to appeal [against] a court decision are made by senior technical officers as detailed in the practice statement,’ it said.
The Financial Times reported (17 February 2014) that Rupert Murdoch’s News Corp has been paid $882m by Australia’s tax authorities, following its victory in a legal battle over A$2bn in foreign exchanges losses that dates back to 1989.
The case comes amid a lively public debate in Australia on the level of tax paid by companies. G20 finance ministers will gather in Sydney this week to discuss global efforts to tackle tax avoidance. ‘This tax deduction is such a huge number it will refocus attention on the amount of tax that multinationals and large companies are paying in Australia,’ said Louise Boyce, tax counsel at Sydney-based law firm Squire Sanders.
The Australian Tax Office (ATO) declined to comment on the deduction, which was noted in financial accounts filed by News Corp this month in the US as payment from a ‘foreign tax authority’.
The payment to News Corp stems from the company’s victory in a long-running legal case over its entitlement to claim tax deductions in Australia on more than $2bn in foreign exchange losses that it incurred during an intra-group restructuring in 1989.
In a July 2012 ruling, Federal Court Justice Nye Perram ruled that the currency exchanges loss was deductible under the Australian tax code, rejecting the arguments of the Australian tax office.
The losses resulted when News Ltd, which in 1989 was the chief holding, management and operating company for the group, sold its interests in Hong Kong and Bermuda-based subsidiaries to other companies in the group to reduce intra-group debt. At the time, News Ltd had depleted its capital position following foreign expansion, and management felt that a restructuring should take place to bolster its accounts.
The Australian Financial Review reported on Monday that the tax office decided not to appeal against a ruling handed down by the Federal Court of Appeal in favour of News Corp. This decision took place against the backdrop of an acrimonious election campaign, which saw News Corp’s Australian newspapers heavily criticise the Labor government of Kevin Rudd, said the newspaper. The ATO on Monday said it had followed ‘published process’ when deciding on all appeals. ‘All decisions on whether to appeal [against] a court decision are made by senior technical officers as detailed in the practice statement,’ it said.
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