James Hardie avoids $US50M tax bill

The decision came after the company had received a notice from the IRS on June 23, 2008, stating it did not qualify for benefits under the US-Netherlands Tax Treaty for the calendar years 2006 and 2007.Hardie subsequently announced that the IRS’s proposed tax assessment for the years 2006 and 2007 consisted of primary tax of $US37 million, penalties of approximately $US9 million and estimated interest of $US4 million.But the IRS has since concluded that, for those years, the company was entitled to reduced withholding tax rates under the treaty for certain intra-group payments from the US to The Netherlands.Hence, Hardie said these amounts relating to the years 2006 and 2007 were not owed to the IRSHardie said this outcome was not expected to have any impact on the company’s results for the 2009 or 2010 financial years as the company had not set aside any amount in relation to these proceedings.In December 2008, Hardie said it would pay $A153 million to the Australian Taxation Office after finally settling a drawn-out tax dispute over the company’s tax affairs in 2002, and between 2004 and 2006.In June 2008, the company said it could possibly have had an Australian tax liability of up to $A230 million.

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