Westpac loses tax battle with New Zealand

Wespac is facing a $NZ918 million ($A753 million) bill after losing a tax battle with the New Zealand authorities.

The bank's shares, which were placed in a trading halt yesterday pending the court ruling, were dragged lower by the news this morning.

Westpac had been fighting the NZ Inland Revenue Department over nine controversial financial transactions it made between 1998 and 2002.

The NZ High Court ruled that Westpac's transactions were "tax avoidance arrangements entered into for a purpose of avoiding tax," the IRD said.

"The Commissioner has correctly adjusted the deductions claimed by Westpac in order to counteract its tax advantage gained under an avoided arrangement," Justice Harrison said in the official ruling yesterday.

The initial dispute centred around taxes of NZ$586 million ($430 million), but interest accumulated over the period would see this pushed to NZ$918 million ($753 million).

The court's judgement was made public this morning.

Westpac's NZ chief executive George Frazis said he was "very disappointed" and may look to appeal the decision.

"The length of the trial, the time taken to consider arguments, and the time taken to get to this stage, clearly demonstrate the complexity of the issues being contested," he added.

Mr Frazis insisted that the tax charge would not impact the group's day to day operations.

money.ninemsn.com.au 8 Oct 2009

ALL Banks do it (trade fraudulently with YOUR money) ,
it's just a 'mystery' why this came out.