6 May 2010

Inland Revenue probes British American Tobacco

1:04 pm on 6 May 2010

The New Zealand arm of cigarette maker British American Tobacco is being investigated by the Inland Revenue Department for possible tax avoidance issues.

According to accounts just filed with the Companies Office, the company has set aside almost $40 million in back taxes because the IRD is reviewing a transaction the company made.

British American Tobacco says the IRD's probe isn't complete but it will soon make its conclusions known to the company.

It made the provision in light of the $2.2 billion settlement between the IRD and four major banks last year, after investigations into cross-border structured finance transactions.