By Paul McBeth
Jan. 23 (BusinessDesk) - The Australian Tax Office wants more than A$100 million from ASX-listed HT, formerly APN News & Media, over the licensing of former New Zealand mastheads it bundled into NZME and subsequently delisted.
The Australian tax authority released amended assessments for the 2009 through 2012 calendar years, totalling tax
adjustments of A$72 million plus A$32 million of interest, HT said in a statement. That doesn't include penalties, which the ATO hasn't decided whether to apply or not, and the
Australian media group said it understands further assessments amounting to A$30 million for the 2013-through-2016
period, plus interest and penalties if applied.
Sydney-based HT closed its New Zealand branch after carving out NZME as a standalone listed business but has previously acknowledged
ATO planned to challenge the Australian media group's treatment of the royalty income. The ASX-listed shares sank 8.9
percent to A$1.64.
"HT remains satisfied that its treatment of this matter is consistent with relevant legislation," it said in a statement.
"HT intends to lodge an objection with the ATO and if necessary contest the amended assessments through litigation
proceedings."
New Zealand's Inland Revenue Department investigated the arrangements of the mastheads when HT, then APN and controlled by Irish billionaire Tony O'Reilly, bought New NZ Herald publisher Wilson & Horton, where the intangible assets were sold to JPMorgan for $515 million and leased back to the wider group for seven
years at an annual $94.5 million. APN claimed a GST deduction on the whole amount, which it ended up keeping after IRD
dropped its challenge in 2009.
In 2016, before the demerger, IRD had also planned to dispute the media group's use of tax losses to offset the
non-resident withholding tax on the masthead financing transactions but was settled in a wider agreement with the tax
authority which included its use of convertible notes in arrangements with the New Zealand subsidiary. The cost of the
$36.3 million settlement was shared between HT and NZME.
(BusinessDesk)