Acting Business Editor for the NZ Herald

ANZCO loses $1.3 million tax fight

Christchurch-headquartered ANZCO Foods has a turnover of $1.3 billion and more than 3,000 employees worldwide. Photo / File
Christchurch-headquartered ANZCO Foods has a turnover of $1.3 billion and more than 3,000 employees worldwide. Photo / File

One of New Zealand's largest meat exporters has lost a $1.3 million tax fight with Inland Revenue.

Christchurch-headquartered ANZCO Foods has a turnover of $1.3 billion and more than 3,000 employees worldwide.

The firm, founded and chaired by businessman Sir Graeme Harrison, is majority owned by Japanese interests.

The company went to the Christchurch High Court earlier this year after Inland Revenue refused to allow it tax deductions of $430,911 for the three years between 2009 and 2011.

The beef and lamb exporter attempted to claim those deductions on a $5.6 million payment made to rival AFFCO to allow it process and freeze meat at a Waitara plant formerly owned by that company.

The payment followed a negotiated settlement with AFFCO to vary an encumbrance that restricted ANZCO from using the land for those activities.

ANZCO treated the result of the settlement as conferring upon it a right to use land and sought to depreciate the item for tax purposes.

However, the Commissioner of Inland Revenue did not accept that money ANZCO paid to AFFCO was depreciable intangible property and refused its claimed deductions.

ANZCO then challenged that assessment before Justice Cameron Mander but was unsuccessful in a decision released publicly yesterday.

What ANZCO obtained from the lifting of the restrictions did not fall within the definition of depreciable intangible property in tax laws, he said.

"The Commissioner's assessments for the 2009 to 2011 tax years are confirmed as correct," Justice Mander said.

He awarded costs to Inland Revenue.

- NZ Herald

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