ATO to Return $53M to Tabcorp Following Tax Dispute Resolution

Earlier today, Tabcorp, Australia’s largest gambling company, announced that it has reached a resolution to a tax dispute with the Australian Taxation Office (ATO). The resolution concerns income tax treatment of payments for various licenses and authorities.

Tabcorp has already paid the disputed amount of tax liabilities and interest in full, the company announced. However, the settlement with the ATO will see the office return around AUD 83 million (around $53 million in USD) to the gambling giant. The sum represents 20% of the disputed tax liabilities and interest, Tabcorp noted.

Each proceeding brought by the taxpayers will be dismissed, the statement informs.

Tabcorp, meanwhile, will have to pay around AUD 37 million (approximately $24 million) to The Lottery Corporation Limited, as outlined in the Separation Deed from March 25, 2022. Following that, Tabcorp will recognize a benefit of almost AUD 45 million ($29 million) after tax in its financial statements for the fiscal year ending June 30, 2024.

Finally, the agreement with the ATO also features details on how Tabcorp will treat future license fees. Under the agreement, the Australian gambling giant will treat the fees as being of a capital nature. This change, the company noted, is unlikely to have a significant effect on its future financial performance.

Tabcorp Has Had Its Share of Ups and Downs

In other news, the Victorian Gambling and Casino Control Commission (VGCCC) recently slapped Tabcorp with the largest fine it has ever handed. The fine relates to a critical system outrage Tabcorp suffered during the Spring Racing Carnival back in 2020, which disrupted the company’s services for a whopping 36 hours.

Since Tabcorp was unable to prevent the “unacceptable” failure and was not sufficiently cooperative with the VGCCC, the authority handed a fine of AUD 1 million (approximately $638,000) to the company.  

After handing the fine, the VGCCC emphasized that it will not tolerate any attempts to obstruct its investigations.

A few weeks ago, Tabcorp published its full-year results for the fiscal year ended on June 30, 2023. Posting AUD 66.5 million ($42.75 million), the company surpassed its forecasts. The favorable metrics were attributed to the company’s outstanding success in Queensland.

Prior to that, the Australian gambling giant extended its Sky Racing rights deal with Sportsbet by 10 more years.