Arrium to fight tax office over $26m bill

2 Nov 2012, 4:23 pm   -   Source: AAP

Arrium is poised for a fight the tax office over claims it owes $26 million in relation to a sale and leaseback deal struck in 2004.

Steelmaker Arrium faces a $26 million bill from the tax office linked to a sale and leaseback deal involving plant and equipment eight years ago.

Arrium said it strongly disputes the tax office's belief that the company should not have claimed income tax deductions on lease rental payments made under the 2004 deal.

It said the tax office estimated the total liability was about $26 million, including $5.4 million in interest payments and penalties of $4.1 million.

"Arrium intends to vigorously defend its position including pursuing all avenues of objection as appropriate," the company said in a statement on Friday.

Arrium intends to apply for deferred or part payment of the amended income tax assessments the tax office plans to issue for the financial years of 2006 to 2010.

"Any part payment together with interest will be fully refundable to Arrium should the company's challenge be successful," the company said.

Arrium, formerly known as OneSteel, noted that the tax office had recently agreed to refund about $8 million plus interest on an unrelated issue.

Arrium's shares closed 1.5 cents higher at 70 cents.

The stock slumped by 13 per cent on Thursday after its Asian suitor walked away from a $1 billion takeover offer.

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