Bloomberg News

News Corp Wins $2 Billion Tax Dispute With Australia

July 16, 2012

News Corp., (NWSA:US) the media company run by Rupert Murdoch, won a tax dispute in Australia over more than A$2 billion ($2 billion) of currency exchange losses resulting from a restructuring that started in 1989.

News Corp.’s Australian units claimed tax deductions of A$630 million in 2001 and A$1.4 billion in 2002 for losses transferred to them from News Publishers Holdings Pty. The Australian Tax Office had rejected the claims.

Federal Court Justice Nye Perram in Sydney today overruled the tax office, accepting the currency exchange loss would be deductible under the tax code.

“I accept the thrust of the taxpayers’ case,” Perram said in court today, referring to the News Corp. units. “The assessments were excessive.”

The losses arose from a restructuring that began in 1989 when News Ltd. was the holding, management and operating company for Murdoch’s media business, Perram wrote in his ruling.

At the time News Ltd. had capital and reserves of negative A$239 million and had to show it was in good financial standing to raise more money, Perram said. The company sold interests in Hong Kong and the U.S. to other units, using the proceeds to reduce its debt, Perram wrote.

The debt swaps were made primarily in Australian and U.S. dollars and British pounds, with News Corp. claiming it was entitled to deduct losses that resulted from the decline in comparative value of the Australian dollar from 1991 to 2002.

The case is News Ltd. v. Commissioner of Taxation. NSD843/2009. Federal Court of Australia (Sydney).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net


Later, Baby
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • NWSA
    (News Corp)
    • $16.88 USD
    • 0.09
    • 0.53%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus