By Gareth Vaughan
ASB has filed legal proceedings to challenge an Inland Revenue Department claim for retrospective tax totaling $153 million plus interest and penalties.
The bank's latest General Disclosure Statement notes the dispute relates to a "liquidity funding transaction" that was subject to revised IRD assessments for the 2008 and 2009 years.
"The bank has commenced legal proceedings to challenge those assessments," ASB says. "The tax position has a potential liability of $153 million plus interest and penalties."
"The bank 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."
ASB also says if its provision proves to be inadequate, "those proceedings may have a material adverse effect on the financial performance of the bank for the relevant financial year."
An ASB spokeswoman would only add that the bank had filed proceedings in the High Court and wouldn't comment further. And an IRD spokesman told interest.co.nz IRD had filed a statement of defence in the case, and wouldn't comment further because the case was before the courts.
ASB has previously disclosed the dispute, but has stopped short of saying it had commenced legal proceedings to challenge the IRD assessments. ASB's June year annual report also noted the bank had paid $23 million to settle a dispute with IRD "of historical tax matters," which neither ASB nor IRD was prepared to comment further on.
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