By Gareth Vaughan
ASB has coughed up $23 million to settle a tax dispute with the Inland Revenue Department.
The bank's annual report shows $23 million was paid during the year to June 30 in a "settlement of historical tax matters."
Neither ASB nor IRD were prepared to say exactly what the payment related to.
“In previous periods, certain transactions were subject to the formal tax dispute resolution process," an ASB spokesman told interest.co.nz.
"The treatment of these transactions has now been resolved by agreement between the Bank and the IRD. The settlement of historic tax matters of $23 million includes settlement of this dispute and the resolution of other historic tax matters. Due to confidentiality provisions, we are unable to provide more details.”
And all an IRD spokesman would say was; "I am afraid we are unable to comment on this issue due to customer confidentiality."
'Liquidity funding transaction'; Potential liability of $176 mln plus interest & penalties
ASB's annual report also notes that as of June 30 it had a tax position "relating to a liquidity funding transaction" that was being reviewed by IRD and is subject to a formal tax dispute resolution process.
"As expected, on July 4 the Bank received assessments from the IRD in relation to the transaction for the 2008 and 2009 tax years. The tax position has a potential liability of $153 million plus interest and penalties. The Banking Group has made what it considers to be adequate provision for this matter based on its assessment of the merits of the arguments and independent advice received."
"In previous periods, the Banking Group had other transactions that were also subject to the formal tax dispute resolution process. The treatment of these other transactions has now been resolved by agreement between the Banking Group and the IRD. The tax effect of prior period adjustments includes settlement of this dispute and resolution of other historic tax matters."
"As at June the Banking Group had tax positions subject to the formal tax dispute resolution process with a potential liability of $176 million plus interest and penalties," ASB added.
In a previous General Disclosure Statement ASB said the dispute involved "certain equity swap transactions" as well as a "liquidity funding transaction."
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