Inland Revenue has won a landmark tax avoidance case that will influence 16 similar cases disputing $226 million in tax.
The High Court in Auckland has ordered the Australian-based kitchenware supplier Alesco to pay $8.6m in tax and penalties.
Alesco is one of 16 companies that used optional convertible notes in its New Zealand subsidiaries in the early 2000s, a cross-border way to convert debt to equity and minimise tax.
But Inland Revenue says they were interest-free loans.
Ernst & Young's tax partner, Jo Doolan, says other companies facing the same situation have cause for concern.
