Westpac hit for extra tax payment in NZ
(5 October 2004 – New Zealand) New Zealand’s Inland Revenue Department has found Westpac potentially liable for up to NZ$25 million in extra tax payment following an investigation into structured finance transactions undertaken by the bank since 1999.
The bank said it had paid the correct amount of tax and would contest the decision.
The IRD has been clamping down on the amount of tax paid by Australian banks which have units operating in New Zealand.
In August, Westpac announced the IRD was reviewing structured finance transactions which occurred between 1999 and 2004. The bank said it could be hit for as much as NZ$647 million in extra tax payments.
However, the IRD has issued tax amendments against just three transactions that took place in 1999.
Westpac said it is confident the tax treatment applied was correct in all cases and that it sought a binding ruling from the IRD on an initial transaction in 1999, which was confirmed in 2001.
"Westpac therefore does not accept that the reassessments are correct and will contest them. Westpac does not expect to raise a provision for any tax liability relating to this matter in its 2004 accounts," the bank said.
The IRD has been clamping down on the amount of tax paid by Australian banks which have units operating in New Zealand.
In August, Westpac announced the IRD was reviewing structured finance transactions which occurred between 1999 and 2004. The bank said it could be hit for as much as NZ$647 million in extra tax payments.
However, the IRD has issued tax amendments against just three transactions that took place in 1999.
Westpac said it is confident the tax treatment applied was correct in all cases and that it sought a binding ruling from the IRD on an initial transaction in 1999, which was confirmed in 2001.
"Westpac therefore does not accept that the reassessments are correct and will contest them. Westpac does not expect to raise a provision for any tax liability relating to this matter in its 2004 accounts," the bank said.
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