UBS AG says it owes Brazil at least $1.2 billion (€0.9 billion) in back taxes dating back to when the Swiss lender owned an investment bank in the country.

UBS said in its annual financial report on Tuesday that BTG Pactual Group, which was formed when it sold the investment bank in 2009, had submitted “contractual indemnification claims” worth that amount, which includes interest and penalties.

UBS, which owned Banco Pactual SA between 2006 and 2009, sold the unit to a group led by Brazilian financier André Esteves for $2.5 billion (€1.8 billion) in 2009 to raise money to cover credit-related losses in the wake of the global financial crisis of 2008.

According to UBS, the claims “pertain principally to several tax assessments issued by the Brazilian tax authorities against Pactual relating to the period from December 2006 through March 2009, when UBS owned Pactual”.

BTG has also informed the Swiss bank of additional Banco Pactual-related inquiries by Brazil’s tax agency for the same period but “involving substantially smaller amounts,” UBS said.

The notifications come a week after the Government gave the go-ahead to UBS’s purchase of local brokerage Link Corretora. Brazilian newspaper O Estado de S. Paulo reported the news early yesterday.

Public relations executives working for the Brazil-based unit of UBS and BTG Pactual had no immediate comment on the report. The finance ministry was not availableto comment.

UBS announced a fourth-quarter net loss of 1.89 billion Swiss francs (€1.5 billion)on Tuesday, following a hefty fine for rigging benchmark interest rates.