BNZ tax charges continue run of woe for NAB
(6 April 2004 – New Zealand) National Australia Bank subsidiary, Bank of New Zealand, said it will fight the Inland Revenue Department’s amended tax assessments for NZ$36 million plus interest of NZ$21 million resulting from three "structured finance transactions" that took place in 1998 and 1999.
BNZ said it had complied with tax law and would fight the IRD’s claims, which could push the assessments even higher as the IRD said there were still penalties to take into account.
"BNZ believes the IRD has calculated the assessments for 1998 and 1999 at unnecessarily high levels," the bank said.
The bank went on to say it had undertaken similar transactions since 1999 but that the IRD had not yet issued amended assessments for those years.
BNZ said despite this, the maximum sum of primary tax which IRD might claim from Bank of New Zealand for the years after 1999 is approximately NZ$212 million.
The bank said it had obtained legal opinions that confirm that the transactions complied with New Zealand tax law, and that they were similar to those done by other banks.
Under structured finance transactions, a foreign company is able to use a New Zealand subsidiary to invest in a third country and face a reduced 15 percent tax rate.
"BNZ believes the IRD has calculated the assessments for 1998 and 1999 at unnecessarily high levels," the bank said.
The bank went on to say it had undertaken similar transactions since 1999 but that the IRD had not yet issued amended assessments for those years.
BNZ said despite this, the maximum sum of primary tax which IRD might claim from Bank of New Zealand for the years after 1999 is approximately NZ$212 million.
The bank said it had obtained legal opinions that confirm that the transactions complied with New Zealand tax law, and that they were similar to those done by other banks.
Under structured finance transactions, a foreign company is able to use a New Zealand subsidiary to invest in a third country and face a reduced 15 percent tax rate.
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