Air NZ Says May Face Up To NZ$107M In Extra Tax
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Air NZ Says May Face Up To NZ$107M In Extra Tax
Dow Jones
Air NZ Says May Face Up To NZ$107M In Extra Tax
WELLINGTON (Dow Jones)--Air New Zealand said Monday it faces a bill for Hong Kong back taxes of up to NZ$107 million, but will appeal against the assessment.
Hong Kong's Inland Revenue Department has revised its tax assessments for Air New Zealand's Hong Kong branch and said that the airline owes the equivalent of NZ$47 million in back taxes from 1989 to 2002.
If the Hong Kong Inland Revenue Department's approach is followed in subsequent years, a further NZ$60 million could be added to the bill, the airline said in a statement.
Air New Zealand said it has always had "professional advice from leading accounting firms in relation to Hong Kong tax" and will appeal against the decision.
"Air New Zealand's taxation and legal advisors have indicated that there are grounds upon which the assessments can be challenged and Air New Zealand will file objections."
The issue in dispute is the appropriate application of Hong Kong tax laws.
"The company expects that any tax ultimately due will be less than the figure indicated by the revised tax assessments," Air New Zealand said.
UBS aviation analyst Timothy Ross said that the worst case scenario of the New Zealand carrier having to pay the full NZ$107 million would wipe 2 NZ cents-a-share from the valuation of Air New Zealand shares.
Ross, however, said the airline may not have to pay the full amount of back taxes and may in fact not have to pay anything.
Hong Kong's Inland Revenue Department had presided over Air New Zealand's tax arrangements for the past 15 years before revising its assessment and "I suspect that they're probably coming from a fairly hard position to argue," he said.
Air New Zealand shares were down 1 cent, or 2.6%, at NZ$0.38.
The airline said any tax it is ultimately required to pay can be met from its cash reserves "without causing any operational or current financial issues."
A provision for the potential tax liability hasn't been made in the airline's accounts.
-Wellington Bureau, Dow Jones Newswires; 64-4-471-5990; [email protected]
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Air NZ Says May Face Up To NZ$107M In Extra Tax
WELLINGTON (Dow Jones)--Air New Zealand said Monday it faces a bill for Hong Kong back taxes of up to NZ$107 million, but will appeal against the assessment.
Hong Kong's Inland Revenue Department has revised its tax assessments for Air New Zealand's Hong Kong branch and said that the airline owes the equivalent of NZ$47 million in back taxes from 1989 to 2002.
If the Hong Kong Inland Revenue Department's approach is followed in subsequent years, a further NZ$60 million could be added to the bill, the airline said in a statement.
Air New Zealand said it has always had "professional advice from leading accounting firms in relation to Hong Kong tax" and will appeal against the decision.
"Air New Zealand's taxation and legal advisors have indicated that there are grounds upon which the assessments can be challenged and Air New Zealand will file objections."
The issue in dispute is the appropriate application of Hong Kong tax laws.
"The company expects that any tax ultimately due will be less than the figure indicated by the revised tax assessments," Air New Zealand said.
UBS aviation analyst Timothy Ross said that the worst case scenario of the New Zealand carrier having to pay the full NZ$107 million would wipe 2 NZ cents-a-share from the valuation of Air New Zealand shares.
Ross, however, said the airline may not have to pay the full amount of back taxes and may in fact not have to pay anything.
Hong Kong's Inland Revenue Department had presided over Air New Zealand's tax arrangements for the past 15 years before revising its assessment and "I suspect that they're probably coming from a fairly hard position to argue," he said.
Air New Zealand shares were down 1 cent, or 2.6%, at NZ$0.38.
The airline said any tax it is ultimately required to pay can be met from its cash reserves "without causing any operational or current financial issues."
A provision for the potential tax liability hasn't been made in the airline's accounts.
-Wellington Bureau, Dow Jones Newswires; 64-4-471-5990; [email protected]
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Just watched an article on TV from CNBC Asia and their reporters and analysts were fairly adamant the HK govt is taking a hard-line stance on this one.
The important point raised was that NZ does alot of business with HK and if not cleared up could result in loss of business in terms of exports from NZ to HK - something the kiwis want to avoid at all costs.
Something else for Helen Clark to whinge about!!
The important point raised was that NZ does alot of business with HK and if not cleared up could result in loss of business in terms of exports from NZ to HK - something the kiwis want to avoid at all costs.
Something else for Helen Clark to whinge about!!
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Dow Jones
Wednesday March 24, 6:54 AM AEDT
NZ PRESS: Air NZ's Tax Plan Draws IRD Scrutiny
WELLINGTON (Dow Jones)--Air New Zealand (AIR.NZ) deals described as legalized tax avoidance have attracted the attention of the Inland Revenue Department after Hong Kong authorities hit the company with a surprise tax bill that could total NZ$107 million, the Business Herald reported Wednesday.
The report noted that Hong Kong authorities have demanded that Air New Zealand pay an initial assessment of NZ$47 million on aircraft leasing deals dating back to 1989.
Former Air New Zealand chairman Selwyn Cushing described the deals as a "very ingenious and lawful way of doing things to benefit shareholders".
The report said a senior source confirmed that the "New Zealand IRD is obviously looking into this also".
Newspaper Web site: http://www.businessherald.co.nz
- Wellington Bureau, Dow Jones Newswires; 64-4-471-5990; [email protected]
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Wednesday March 24, 6:54 AM AEDT
NZ PRESS: Air NZ's Tax Plan Draws IRD Scrutiny
WELLINGTON (Dow Jones)--Air New Zealand (AIR.NZ) deals described as legalized tax avoidance have attracted the attention of the Inland Revenue Department after Hong Kong authorities hit the company with a surprise tax bill that could total NZ$107 million, the Business Herald reported Wednesday.
The report noted that Hong Kong authorities have demanded that Air New Zealand pay an initial assessment of NZ$47 million on aircraft leasing deals dating back to 1989.
Former Air New Zealand chairman Selwyn Cushing described the deals as a "very ingenious and lawful way of doing things to benefit shareholders".
The report said a senior source confirmed that the "New Zealand IRD is obviously looking into this also".
Newspaper Web site: http://www.businessherald.co.nz
- Wellington Bureau, Dow Jones Newswires; 64-4-471-5990; [email protected]
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Hmmm.... still more skeletons ....no doubt the ghost of SC past. Wonder who owns "NZ Intl Airlines HKG"? (bet we can guess) could they have been skimming leases all this time...surely not? afterall who needs a dividend. looks like Air NZ will need to get the Mop out again!!!! the kiss of Death still lingers.
sorry NZER couldnt resist it!
sorry NZER couldnt resist it!
