SYDNEY (Reuters) - The remnants of one of Britain's oldest communications firms, Cable & Wireless, on Monday lost an appeal in Australia for a $339 million (£262 million) tax refund over the 2001 sale of Australian communications group Optus to Singapore Telecommunications Ltd (Singtel) (SI:STEL).
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 (£1.1 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 percent 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 percent. 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 (L:VOD) in 2012.