BNZ reaches a settlement with Inland Revenue

BNZ reaches a settlement with Inland Revenue

BNZ has reached a full and final settlement with the Commissioner of Inland Revenue regarding disputed tax assessments for six structured finance transactions entered into between 1998 and 2005.

BNZ had challenged the assessments in the High Court and in a judgment delivered on 15 July 2009; the Court confirmed the disputed assessments. BNZ lodged an appeal with the Court of Appeal on 11 August 2009. As a result of the settlement the proceedings will now be discontinued.

Under the settlement BNZ has paid Inland Revenue NZ$658 M, which represents 80% of the full amount of tax and interest. Collectively, these payments fall within the provision of NZ$661 M raised by BNZ in August this year to reflect the High Court decision.

BNZ CEO Andrew Thorburn said, “This is a complex and technical issue, and it has been the subject of much debate. Simply put; we acted in good faith at the time, the High Court has delivered a judgment, and now it is time to settle so that we can move on and move forward.”

This settlement will have no impact on BNZ’s ability to meet any debt and/or equity obligations (including those related to BNZ Income Securities Limited and BNZ Income Securities 2 Limited).

BNZ’s overall capital position remains well in excess of Reserve Bank of New Zealand requirements. The interest component of the settlement will be tax deductible and the balance of the provision not utilised will be included in statutory profit but excluded from cash earnings.

ENDS

© Scoop Media