Alesco settles IRD tax case
Australia's DuluxGroup says it has reached an out-of-court settlement with Inland Revenue over a long-running tax dispute.
The dispute between its New Zealand subsidiary, Alesco, and Inland Revenue had been seen as a test case for about $300 million of disputed tax payments involving other businesses, including Telstra and MediaWorks.
Inland Revenue had challenged the use of optional convertible notes (OCNs) by Alesco to minimise its tax bill when funding two acquisitions.
The High Court and Appeal Court ruled in favour of the tax department, deciding the funding mechanism was an abusive of tax law, but Alesco last year obtained leave to appeal to the Supreme Court.
DuluxGroup said the confidential settlement it had reached with Inland Revenue would lead it to pay a sum that was "towards" but less than the A$12.7m (NZ$13.7m) that it had set aside as a provision in the event of an adverse ruling by the Supreme Court.
The company said it would provide further details on the settlement when it reported its interim results in May.