Tabcorp Settles Dispute with Australian Taxation Office

Tabcorp Holdings Limited, an Australian entertainment and gaming company, has reached a resolution in its dispute with the Australian Taxation Office (ATO) regarding the income tax treatment of payments related to various licences and authorities.

In compliance with the settlement, Tabcorp has made full payment of the disputed tax liabilities and associated interest to the Commissioner. As a result, the ATO will refund approximately $83 million to Tabcorp, representing 0% of the contested tax liabilities and interest. All legal proceedings initiated by the taxpayers will be dismissed.

To adhere to the terms of the Separation Deed dated March 25, 2022, between Tabcorp and The Lottery Corporation Limited (TLC), Tabcorp will be required to make a payment of approximately $37 million to TLC.

The financial impact of this resolution will be reflected in Tabcorp's financial statements for the fiscal year ending on June 30, 2024. The company will recognize a benefit of approximately $45 million after tax, categorizing it as a significant item.

Additionally, the settlement includes an agreement regarding the treatment of future licence fees for renewals of existing licences. Tabcorp must classify these fees as having a capital nature, with certain agreed-upon limitations. Tabcorp anticipates that this agreement will have no material impact on its future financial results.

The resolution of this dispute marks a significant development for Tabcorp, providing clarity on its tax obligations and resulting in a substantial financial benefit for the company.

By fLEXI tEAM