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Australia dismisses Cable & Wireless appeal for US$339m tax refund
[SYDNEY] The remnants of one of Britain's oldest communications firms, Cable & Wireless, on Monday lost an appeal in Australia for a US$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 (S$2.1 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 per cent 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 per cent. 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.