Australian racing and wagering operator Tabcorp has resolved a dispute with the Australian Taxation Office (ATO), resulting in a financial benefit in favor of the company. The resolution, which will be reflected in Tabcorp’s financial statements for the fiscal year ending June 2024, entails an after-tax benefit of approximately US$28.7 million (AUD45 million).
This dispute centered on the income tax treatment of payments associated with various licenses and authorities. Tabcorp has now settled the full amount of disputed tax liabilities and interest with the tax office, leading to a resolution that benefits both parties.
As part of the settlement, the ATO will refund approximately US$53.2 million (AUD83 million) to Tabcorp, equivalent to 20% of the disputed tax liabilities and interest. In return, Tabcorp has agreed to drop all proceedings related to the disputed amount.
However, in compliance with the terms of its Separation Deed dated March 25, 2022, Tabcorp is obliged to pay around US$23.7 million (AUD37 million) to The Lottery Corporation Limited (TLC).
This payment obligation stems from Tabcorp’s demerger of its lotteries and keno business, with TLC subsequently becoming an independent entity listed on the Australian Securities Exchange.
The US$28.7 million (AUD45 million) benefit resulting from this resolution will be treated as a significant item in Tabcorp’s financial statements.
Additionally, the settlement includes an agreement concerning how Tabcorp will treat future license fees associated with the renewal of existing licenses. The company is required, within agreed limitations, to categorize these fees as of a capital nature. Tabcorp believes that this agreement will not have any substantial impact on its future financial results.
Original article: https://www.yogonet.com/international/noticias/2023/09/12/68717-tabcorp-refunded-288m-after-resolving-dispute-with-australian-taxation-office
