$1bn tax rebate for Lucent

The rebate, made possible thanks to a change in US tax law introduced in March this year was a contributing factor in turning a $4.5bn loss into a positive $103m for the financial year ended September 30 2002.

Earlier this month Lucent announced a further 10,000 redundancies and suggested a reverse stock split to put its share price back into double figures. It will be voted on in February. 'Under US tax law, a company can carry back 2001 losses to the five previous years and offset the taxable income in those years,' a Lucent spokesperson told Accountancy Age.

Because the company recognised a large net operating loss during 2001, Lucent 'filed a refund claim and received a refund for taxes paid in the years 1996 - 2000.'

A similar tax law exists in the UK but is restricted to one-year carry back, said Derek Brownley of the Institute of Directors.

He added that because the US government changed the law in March it looked like a 'deliberate policy to give US companies tax relief'.