Tabcorp Holdings Limited announced on Monday that the company has recognized a $45 million tax benefit and resolved a dispute it had with the Australian Taxation Office (ATO). The argument was over the treatment of income tax and licence payments. The betting operator claimed it paid all its licence fees and interest payments in full to the ATO.
With the issue resolved, Tabcorp said it will include the refunded money in its FY24 report due next year.
Tabcorp Will Pay $37 Million to the TLC
The ATO agreed to pay $83 million to the wagering giant, which is about a fifth of the payments Tabcorp disputed. Tabcorp will respond by dropping all proceedings related to the amounts of the tax liabilities and other payments in question.
However, Tabcorp will be required to fork about $37 million to The Lottery Corporation Limited (TLC) according to the Separation Deed (related to the demerger of Tabcorp’s lotteries and wagering businesses) issued on 25 March 2022. After the two entities demerged, the TLC listed on the Australian Stock Exchange.
That leaves Tabcorp with a $45 million windfall.
Tabcorp has also agreed to treat future licence fees “as being of capital nature.” The company added that treating licence renewals and extensions payable won’t have “any material effect on future results.”