Resource Capital Funds, the Denver- based private equity firm being pursued by Australian tax authorities, said it’s “comfortable” with its position and expects the issue to be resolved “favorably.”
The Australian newspaper yesterday reported the Australian Taxation Office had frozen the firm’s local assets, alleging its offshore structure may allow it to avoid taxes. The ATO is seeking A$43 million ($42 million) in tax, penalties and interest from Resource Capital Fund III LP, one of the company’s funds, the newspaper said, citing court documents in Perth, Western Australia.
The structure of Resource Capital Funds conforms to Australian tax rules, Brian T. Dolan, general counsel for the firm, said in a statement e-mailed today. The firm has almost entirely U.S. investors subject to U.S. tax laws and, when related to Australian investments, the U.S.-Australia Double Taxation Treaty, Dolan said.
“We are making very strong representations to the court on the underlying issues here as well as the unfortunate manner in which the ATO conducted itself from a procedural viewpoint,” Dolan said in the statement. If the firm had been contacted by the ATO, it would have started “full and open” discussions, he said in the statement.
The ATO said in a statement yesterday it “cannot comment under tax law on an individual taxpayer’s situation or case.”