NEWS Corporation’s Australian assets have won a legal battle against the Australian Taxation Office which had disallowed more than A$2 billion in currency exchange deductions.
The Federal Court this week rejected as excessive the tax office’s original assessment that no foreign currency actually changed hands.
Justice Nye Perram found while no cash, coin or bank deposits were exchanged, there was an exchange of liabilities, and that was sufficient to satisfy the relevant tax legislation.
“I see no reason why a loss arising from an exchange of liabilities will not satisfy the requirements … It is not limited in its operation to exchanges of foreign currency and Australian money,” he said.
Justice Perram ordered the tax office to redetermine News’ liability and pay News’ costs.
The 30 News companies were appealing currency exchange losses linked to global restructures of News Corp in 1989 and 1991.
News argued it was entitled to claim losses resulting from the repayment of a foreign currency loan if there had been a comparative decline in the Australian dollar.
Losses were estimated as A$629.6 million in 2001 and A$1.42 billion in 2002, and had been shared among companies including newspaper publishers The Herald and Weekly Times and Nationwide News.