Court decides on CBH Group's tax-exempt status

by World Grain Staff
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WEST PERTH, AUSTRALIA — The CBH Group said on Dec. 17 that it welcomed the judgment made by the Federal Court dismissing the Commissioner of Taxation's appeal against CBH retaining income tax-exempt status for the storage and handling side of its business.

CBH Group Chairman Neil Wandel said the exemption has meant that some millions of dollars are retained annually within CBH which have been used for reinvestment in the maintenance and upgrade of Western Australia's grain storage and handling network and for the benefit of the grain industry.

"This is why we have fought so strongly to keep our tax-exempt status," Wandel said. "We strongly believe the tax exemption is valid under sections 50-1 and 50-40 of the Income Tax Assessment Act because of the role CBH plays in promoting the development of the grain industry and agricultural resources."

Wandel said the decision provided important clarity as the board moved into the final stages of its current investigation into the most appropriate future structure for CBH.

The CBH Group's taxation status is one of the factors being considered by the board to assess and compare the three short-listed co-operative models which are now in the final stages of evaluation. The other main factors include grower preferences on how value should be provided to them, and strategic, legal and financial considerations.

The three short-listed models are a non-distributing co-operative, which would retain the tax-exempt status, a distributing co-operative and a dual co-operative.

Wandel said the board was still working toward sharing a decision on the preferred model with CBH's grower members in early 2011 before going to members for a formal vote on the future structure in the second half of 2011.
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