Westpac to appeal tax avoidance ruling
Westpac to appeal tax avoidance ruling
by Pattrick Smellie
Nov 3. (BusinessWire) - Westpac
New Zealand will appeal last month's billion dollar
judgement against it in the High Court, which found that
four representative structured finance transactions between
1998 and 2005 constituted tax avoidance.
"In our view, there are sound arguments that warrant an appeal of the High Court's decision," said Westpac NZ chief executive George Frazis of the ruling on transactions which allowed foreign-owned banks operating in New Zealand effectively to choose their own rate of tax to pay.
The case is
unlikely to be heard any earlier than the last quarter of
next year.
Such are the sums involved that appeals
to the Supreme Court are also likely, irrespective of how
the Court of Appeal rules, meaning that the status of more
than $2.2 billion of unpaid back taxes is likely to remain
in limbo for some years yet. The total sum involved does
not include penalties which the IRD is able to apply as it
sees fit.
Earlier this year the Bank of New Zealand,
owned by National Australia Bank, lost its challenge against
the findings of the Commissioner of Inland Revenue on back
taxes and interest owing of $654 million.
In recent
days, another applicant against the IRD - ANZ National Bank
- added a further $240 million to provisioning already in
place to cover unpaid back taxes and interest of $562
million involved in its claim against the IRD.
The
two remaining banks with exposure to court actions are ASB,
which is owned by Commonwealth Bank of Australia and is
contesting claims worth $280 million, and Rabobank of
Holland. Deutsche Bank settled with the IRD on similar
transactions some time ago.
(BusinessWire)
18:33:48