The High Court of New Zealand today found against NAB's Bank of New Zealand unit in its attempt to deduct tax across six structured finance transactions with offshore counterparties. The transactions took place between 1998 and 2005.
The tax in dispute amounts to NZ$416 million ($336 million). in addition, Bank of New Zealand faces an interest bill of $238 million.
The New Zealand Inland Revenue Department has yet to consider whether to apply penalties.
NAB shares rose 58 cents, or 2.5 per cent, to $23.93, in line with gains in the broader market.
Bank of New Zealand chief executive Andrew Thorburn said the bank is disappointed by the finding and will review the judgement and make a decision within the next few weeks on whether to appeal the decision.
''At this time it is our expectation that we will do so,'' Mr Thorburn said.
Bank of New Zealand said the judgement will no have any impact on its ability to meet its debt or equity obligations.
ejohnston@theage.com.au
The Age
