Sharechat Logo

Tax office appeals Vector's $53 million win on CBD tunnel

Thursday 25th September 2014

Text too small?

The Inland Revenue Department will appeal a High Court decison which found in favour of Vector over a $53 million payment relating to the Auckland electricity and gas network operator's access rights to its Auckland CBD tunnel.

Last month, Justice John Faire at the High Court in Auckland declared payments made by national grid operator, Transpower in relation to the underground tunnel, known as NSTC, didn't constitute income and cancelled the tax department's assessment, according to the Aug. 29 judgment. IRD is appealing the decision, Vector said in a statement today. 

The August judgement rejected the IRD's claim that 'other revenues' were intended to capture capital payments of this nature, and that "if Parliament intends to tax capital it must do so with clear language," the judgment said.

"The payments were of a once and for all nature producing advantages to Transpower which were enduring," the judgment said. "This factor clearly points toward the expenditure being capital in nature."

That means the section of the Income Tax Act 2007 the IRD was relying on didn't apply, a finding which "is enough to dispose of the case."

The judge reserved an order on costs to let the parties discuss the matter.

At the time of the judgement, Vector said the ruling meant the tax department will be required to refund $7.6 million of tax already paid, subject to any appeal process.

Shares of Vector rose 0.4 percent to $2.63, and have gained 2 percent this year.

 

 

 

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

ASB workers to strike as bank proposes an effective pay cut
Rising tides, sinking stocks: study explores cost of climate change
May 2nd Morning Report
AGL - Change in Senior Management
Devon Funds Morning Note - 01 May 2024
Rick Christie to step-aside as a non-executive director
CHI - New customer contract to upgrade Marsden Point
Synlait announces changes to Board of Directors
May 1st Morning Report
Devon Funds Morning Note - 30 April 2024