One of New Zealand’s biggest forestry companies has paid virtually no tax for more than a decade. Sources: Fairfax NZ News, Stuff NZ
Rayonier New Zealand, a subsidiary of Florida-based forest investor Rayonier, manages about 130,000 hectares of New Zealand forests owned by Matariki Forests Group, itself also owned by the listed Florida company.
Its accounts show a tax expense of just NZ$9000 in the year to December 2012, equivalent to a tax rate of 0.5% on its pretax profit of NZ$1.7 million.
Since 2000, Rayonier has reported cumulative pretax profits of NZ$102.6m and tax expenses of NZ$7.8m, representing an effective tax rate of 7.6%.
Rayonier’s financial statements suggest the origin of the tax benefit was its sale of an MDF plant near Gore in May 1999.
The sale, for an undisclosed sum to a related party in the United States, realised a loss of NZ$36.8m.
The plant had been operating for just 20 months after being opened by Rayonier NZ in October 1997.
The Florida group’s 1999 annual report said the plant had experienced losses because of weak demand from Asian markets and worldwide overcapacity in MDF. However, it said improved volume and prices were expected.
Rayonier’s US unit sold the plant to Korean company Dongwha in 2005 for NZ$59.2m.
A spokesman for Rayonier, Ange Vivian, said she was not at liberty to discuss the reasons for the company’s apparently low tax payments but it complied with all New Zealand tax laws.
The Inland Revenue had audited Rayonier in 2011 and was satisfied the accounts met its requirements, she said.
“Rayonier is a productive and engaged member of the New Zealand business community. Our health and safety operations are of the highest standard and we are working with others in our industry to identify solutions that will lead to better safety performance across all New Zealand forestry operations.”