Jewellery company Michael Hill International is paying out $30.3 million to settle a tax dispute with Inland Revenue.
The directors of Michael Hill announced today that a confidential settlement brought a close to the dispute that arose in late 2008 when the company shifted its main operations to Australia.
The company said in a statement an additional tax liability of $30.3m for the period ending June 2015 will be recognised by the company. No penalties will be paid.
The tax bill won't have any impact on Michael Hill's ongoing operations and won't affect the planned roll out of new stores, the statement said.
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"In settling this dispute the Board has been conscious of the increasing difficulties for our shareholders in trying to understand and quantify the potential price impact of the contingency should an adverse outcome result (reflecting the uncertainty and risk involved in any formal litigation).
"Accordingly whilst the Board remains comfortable that the Group's tax treatment of the transaction fully complied with all relevant tax laws at that time, the Board is now of the opinion that removing the continued uncertainty and the significant cost associated with the dispute, is in the overall best interests of shareholders and that the settlement reached is accordingly a sensible commercial outcome."
This year the company has made the ASX its primary listing, with the NZX a secondary listing, and announced long-standing CEO Mike Parsell would be stepping down.
The results for the year to June 30 will be released on Friday.