Heritage to Appeal Uganda Ruling In Capital Gains Tax Dispute
KAMPALA, Uganda (Dow Jones Newswires), Nov. 24, 2011
U.K.-based Heritage Oil PLC is planning to appeal a ruling by the Ugandan tax court in which it lost its bid to stop the government from collecting at least $404 million in capital gains tax on the sale last year of its interests in the country, the company said Thursday.
Heritage, which has been embroiled in the tax spat since last year, described the ruling as "fatally flawed", adding that it would appeal it through the Ugandan court system starting with the High Court, the Court of Appeal and the Supreme Court if necessary.
"The ruling from the Tax Appeals Tribunal in Uganda is part of the domestic process and is not final and determinative," the company said.
Uganda's Tax Appeals tribunal Wednesday dismissed Heritage's appeal with costs, saying the oil explorer had failed to convince the court that the $1.45 billion sale of 50% of its stakes in two oil blocks in Uganda last year to U.K.-based Tullow Oil PLC (TLW.LN) isn't taxable under Uganda's income tax law.
Heritage further reiterated its earlier position that the transaction isn't taxable. According to the company, the arbitration proceedings in London, which commenced in May, remain the "correct" forum to settle dispute.
Prior to the transaction with Tullow, Heritage had agreed to pay only $120 million in taxes on the transaction which was rejected by government, according to court documents.
The Ugandan government has hired U.S.-based law firm Curtis to defend it in the tax arbitration in London.
Copyright (c) 2011 Dow Jones & Company, Inc.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.