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UBS owes Brazil $1.2 billion taxes for 2006-09: report

People walk in front of a branch of Swiss bank UBS in Zurich, February 5, 2013. REUTERS/Michael Buholzer
People walk in front of a branch of Swiss bank UBS in Zurich, February 5, 2013. REUTERS/Michael Buholzer

SAO PAULO (Reuters) - Brazil has told UBS it owes 2.4 billion reais ($1.2 billion) back taxes dating back to the time when the Swiss lender owned an investment bank in the country, O Estado de S. Paulo newspaper reported on Wednesday, citing documents.

UBS, which owned Banco Pactual SA from 2006-09, said in its annual financial report on Tuesday that BTG Pactual Group was asking $1.2 billion compensation for the liability, Estado said.

UBS sold the unit to Brazilian financier André Esteves and his partners for $2.5 billion in 2009 - the transaction led to the formation of BTG Pactual.

The Estado report came a week after the government gave the go-ahead to UBS's purchase of local brokerage Link Corretora, marking its return to Brazil - UBS had to sell Banco Pactual to raise money to cover credit-related losses in the wake of the global financial crisis of 2008.

Public relations executives working for the Brazil-based unit of UBS and BTG Pactual would not comment on the report. The finance ministry was not available to comment.

According to the UBS annual report, BTG Pactual warned repeatedly of notifications by Brazilian authorities of the overdue taxes, although the size of the debt could be substantially lower, according to Estado.

UBS announced a 1.89 billion Swiss franc ($2.1 billion fourth-quarter net loss on Tuesday, following a hefty fine for rigging benchmark interest rates and compared with a forecast for a 2.08 billion loss.

(Reporting by Guillermo Parra-Bernal; Editing by Dan Lalor)

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