This article is from the Australian Property Journal archive
BUILDING materials supplier James Hardie could be slapped with a $240.3 million tax bill following an Australian Tax Office audit.
The ATO is taking action in the Federal Court seeking the reinstatement of James Hardie Australia Finance Pty Limited, a disbanded subsidiary of James Hardie, which is a prerequisite to issuing an amended assessment for income tax returns for fiscal 2002.
“We understand that the ATO is taking this action as a preliminary step to issuing an amended assessment in respect of at least one of the matters on which the ATO’s views as to the tax payable differs from the position taken in the tax return,” James Hardie’s chief financial officer Russell Chenu said.
Chenu said the company understands that it is the view of the ATO that the primary tax due in respect of JHAF is $101.5 million. Any assessment could also be expected to include penalties estimated at $50.8 million and general interest charges estimated at $88 million.
Any reinstatement of JHAF would be likely to involve the appointment of a new liquidator, who would need to determine, among other things, whether and to what extent JHAF was able to put itself in a position to meet any ultimate tax liability assessed in respect of it.
“The company is considering its position with respect to the ATO proceedings, the merits of the ATO’s tax claim and its position with respect to any obligations of JHAF to the ATO given its prior winding up,”
Chenu said that, in the event that the company is found to have, or otherwise accepts, any liability for tax assessed solely against JHAF or is required to make payments on account of that tax while in dispute, the company expects to have available cash and existing unutilised debt facilities to meet any payment obligations.
James Hardie shares closed 4 cents lower at $4.89.
Australian Property Journal
