Vector has won a High Court fight with Inland Revenue and says is now entitled to a $7.6 million tax refund.
Vector earlier this month appeared before Justice John Faire arguing with IRD about whether $53 million the electricity company received from Transpower is taxable.
The IRD's position was the payments are taxable, Vector's position was that they are not.
Vector, which already paid the disputed tax amount, was pursuing court proceedings to have the IRD reimburse the money.
In a decision released this afternoon, Justice Faire sided with lines company.
"The judgment has found in favour of Vector that a payment of around $53 million relating to access rights to Vector's CBD tunnel was not taxable", the company said in a statement
"Subject to any appeal process the effect is that Inland Revenue will now be required to refund $7.6m of the tax Vector has already paid".
The payments at issue were made by Transpower to Vector in an engineering electricity project.
This was an upgrade by Transpower, the state-owned enterprise which owns and operates the national electricity grid, which saw it install cabling between Penrose and Albany substations in Auckland.
Transpower entered into an agreement in 2010 to use Vector's infrastructure for this project.
Under the agreement, Transpower paid $50 million to Vector for access rights to a tunnel from Penrose to Hobson St in Auckland and another $3 million relating to infrastructure in the North Shore transmission corridor.