By GARETH VAUGHAN
ASB Bank is likely to be the next bank to get an Inland Revenue Department back-tax bill stemming from international financing deals.
The three other main Australian-owned banks, ANZ National Bank, Westpac and the BNZ, all have multi-million-dollar back-tax bills.
All three are disputing them.
ASB's group general manager of finance
and risk management, John Duncan, said yesterday that the IRD was inspecting the bank's deals.
ASB, owned by the Commonwealth Bank of Australia, had supplied the IRD with the information it had requested and was awaiting its decision.
Duncan said he had no indication of when the IRD was likely to make that decision.
The deals under scrutiny are known as structured finance transactions.
They use tax laws that give favourable treatment to money channelled to a foreign borrower through New Zealand.
ANZ, Westpac and BNZ have said they face potential back-tax bills including interest totalling $348 million, $647 million and $269 million respectively, relating to structured finance transactions.
Duncan said the ASB had entered into similar structured finance deals, but would not say how many or how much they were worth.
Finance Minister Michael Cullen announced legislative changes last month that are expected to close off the use of New Zealand as a tax-efficient conduit for loans flowing from one country to another.
Present rules allow the NZ subsidiary of an overseas bank to borrow money from its parent and claim an interest deduction.
Cullen said the proposed changes, to be introduced to Parliament next month, would lead to the main banks paying $360 million a year more in tax.
The ASB's general disclosure statements say the bank paid tax of $115.3 million in the nine months to March this year after posting a profit before tax of $352.8 million.
