Keycorp to appeal ATO ruling

Keycorp plans to appeal a private ruling from the Australian Taxation Office over the sale of its Transaction Network Solutions business to Telstra that could cost it AU$4.4 million in additional income tax liability.

Keycorp plans to appeal a private ruling from the Australian Taxation Office over the sale of its Transaction Network Solutions business to Telstra that could cost it AU$4.4 million in additional income tax liability.

Keycorp requested the private ruling after the company sold the TNS business to Telstra for AU$55 million earlier this year. Prior to the sale, which was completed on September 1, "uncertainties" were discovered in the company's tax liabilities during 2001 and 2002.

According to a statement to the Australian Stock Exchange on Wednesday, Keycorp will "begin the appeal process immediately" after receiving advice from Ernst & Young.

In the statement, Keycorp said: "The key issues contained in Keycorp's request for a private ruling do not appear to have been fully considered by the ATO... Keycorp will continue to work for a timely resolution of this matter".

The outcome of Keycorp's appeal will decide how much, if any, additional income tax the company owes: "An unfavourable outcome to this matter would result in Keycorp incurring and additional tax liability, the estimated, worst case, exposure being AU$4.4 million," the statement said.

Telstra continues to hold around 48 percent of Keycorp's issued shares.