FED: Telstra to transfer assets to sidestep tax bills report

AAP General News (Australia)
12-09-2000
FED: Telstra to transfer assets to sidestep tax bills report

SYDNEY, Dec 9 AAP - Telstra is reportedly preparing to transfer more than $5 billion
in assets to a shelf company in Bermuda to avoid huge tax bills.

The transfer of its assets to the tax haven was a central part of the company's new
alliance with Pacific Century CyberWorks, The Australian newspaper said today.

According to legal agreements between the two companies, the offshore deal included
creating two new companies with headquarters in Bermuda, the paper said.

Companies registerd in Bermuda usually paid no income tax, it said.

The deal could take place as early as next Friday or it could be postponed to March
31 next year, The Australian said.

Stockmarket analysts and Telstra executives said the deal would benefit shareholders
because it avoided the high corporate tax rate in Australia, the paper reported.

"We are in no way trying to avoid or minimise tax in Australia but we are trying to
not have to pay tax again in some other tax regime for what is basically restructuring,"

Telstra treasurer Cliff Davis was quoted as saying.

AAP sal/ao

KEYWORD: TELSTRA BERMUDA

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