News: Australia dismisses Cable & Wireless appeal for $339 mln tax refund

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    SYDNEY, May 1 (Reuters) - The remnants of one of Britain's oldest communications firms, Cable & Wireless, on Monday lost an appeal in Australia for a $339 million tax refund over the 2001 sale of Australian communications group Optus to Singapore Telecommunications Ltd (Singtel) .

    The Australian Tax Office (ATO) has increased scrutiny over how much tax multinational companies operating in Australia pay. In December, it said it was pursuing seven global businesses for over A$2 billion ($1.50 billion) in unpaid tax.

    Cable & Wireless Australia, whose British parent was split up in 2010, took the ATO to the Federal Court in 2015 claiming it should have only paid A$134.5 million in tax, and seeking a $452.45 million refund plus legal costs.

    Under a deal that enabled Singtel to acquire Optus - since renamed Singtel Optus Pty Ltd - Cable & Wireless sold its 82 percent stake in Optus for $A6.2 billion, paying A$586.9 million in tax.

    Almost A$4 billion of the funds received from Singtel was treated as a dividend payment that was taxed at 15 percent. Cable & Wireless argued the transaction should have been treated as a capital gain because of the way the deal was structured.

    Australia's Full Federal Court dismissed Cable & Wireless' claim, saying the company was unable to satisfy the court that it was entitled to request a refund.

    Cable & Wireless was formed more than 140 years ago, initially establishing a telegraph cable service between London and Dublin.

    It split in 2010, with its international division de-merging to form Cable & Wireless Communications. The remainder became Cable & Wireless Worldwide and was acquired by Vodafone Group PLC in 2012.

    ($1 = 1.3319 Australian dollars)

 
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