Australian Tax Office hits HT&E with $179m NZ tax bill
The Australian Tax Office has applied $49m in penalties on media company Here, There & Everywhere over the way it accounted for the sale of some of its New Zealand assets.
HT&E – which currently owns Adshel, Conversant Media and ARN – told the ASX that it had been hit with penalties of $49m, on top of an extra $102m tax bill and $28m in interest. The company says it is ready go to court to battle the penalties.
HT&E’s tax bill
The penalties amount to 50% on the tax adjustments for the years 2009-2015 and are applied by the ATO as a punitive measure when submitted tax returns do not stand up to scrutiny.
HT&E sold off its New Zealand mastheads in 2016
HT&E had previously told the market about the coming tax bill, which was triggered by the company, previously known as APN News & Media, spinning off its New Zealand news mastheads into NZME.
NZME’s assets include the New Zealand Herald, six regional daily papers, the NZME radio network and e-commerce and digital classified sites GrabOne, HeraldHomes and driven.co.nz.
As part of the demerger, The New Zealand branch of HT&E was closed. In September 2016, the ATO issued a position paper, indicating it would challenge the group’s handling of the income which it treated as royalties in accounting terms.
In the ASX statement, the company said: “HT&E strongly disagrees with the rate of penalties imposed and intends to exercise all available objection rights on the application of penalties and interest with ATO including, if necessary, contesting the decision through litigation proceedings (together with the tax adjustments).”
HT&E is currently awaiting ACCC approval for the sale of its outdoor company, Adshel, to Ooh Media. Earlier this year, HT&E also announced it would merge its digital assets under a new business, Generation E Media.
After the announcement, HT&E’s share price was broadly unchanged, giving it a market capitalisation of $748m.
Ouch!
Who were their tax advisers, I wonder?
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