SingTel fighting $330 million tax bill from 2001 Optus purchase
Singapore Telecommunications will “vigorously defend” a $326 million tax bill it received last week from the Australian Tax Office, dating back to its take tover of Optus in 2001 for $17.2 billion.
This is the first time Singtel has revealed the size of the potential bill. Singapore Telecom Australia Investments Pty Ltd first received a tax position paper from ATO in late 2013, and then a Statement of Audit in late 2014.
In 2015, Singtel received a final Statement of Audit Position, and then in July this year it received the outcome of an Independent Review, an internal service offered by the ATO to large corporations.It informed shareholders in it’s first quarter results that Singtel has not yet made a provision for the tax bill.
And then on Thursday Singtel noted in its quarterly results it may pay the tax bill from the current financial year’s free cash flow. It estimates free cash flow of $1.4 billion, but a footnote added this figure is “excluding payment to the Australian Tax Office (ATO) in respect of the amended assessments received on 2 November 2016 from the determinations on the acquisition financing of Optus”.
A spokeswoman confirmed it had received an updated assessment.
“The amended assessments amount to A$326 million, comprising primary tax of A$268 million and interest of A$58 million. We intend to vigorously defend the claim, including pursing all avenues of objection as appropriate,” she said.
A spokesperson for the ATO declined to comment on Singtel’s case, but said it is “resolutely tackling tax avoidance and ensuring multinationals and large companies pay the right amount of tax in Australia”.
“We have been overt that we are actively pursuing intra-company financing and other arrangements multinationals and large companies put in place to avoid paying tax in Australia. The majority of large corporates pay the right amount of tax in Australia and are open and transparent in their dealings with us.”
The London-based Cable & Wireless sold it’s 82 per cent stake in Optus to Singtel for $6.2 billion 15 years ago. It has been working for years to win the funds from the ATO, claiming that of the $586.9 million deposited with ANZ in September 2001 to pay tax to the Commonwealth of Australia, just $134.5 million was legal.
The story SingTel fighting $330 million tax bill from 2001 Optus purchase first appeared on The Sydney Morning Herald.