Shares in Centrebet International Limited soared by more than 8 per cent this morning after the Australian Tax Office (ATO) confirmed that it does not intend to appeal a decision by the Federal Court relating to overpaid goods and services tax (GST), with Centrebet claiming a tax refund of AUD$90.7m and rival operator Paddy Power receiving $36m.
Paddy Power said that the refund relates to GST paid by its Australian subsidiaries, Sportsbet and IAS, between October 2005 and October 2009, with the company to receive AUD$36m (€26m) from the ATO.
Approximately half of the gain is expected to be received as a cash refund later this year and half as a credit against Goods and Services Tax (GST) payable in future years, the company said.
The one-off tax gain followed July’s decision by the Federal Court in Australia which ruled in favour of Sportsbet's and IAS' interpretation of the relevant GST legislation. The relevant legislation has since been amended so the judgement does not impact future periods.
Paddy Power said that the ATO has today confirmed that it does not intend to appeal the Court's decision.
Following the favourable ruling, Centrebet had said previously that it expects to receive a tax refund of $90.7m in respect of sample transactions on the basis that it had incorrectly calculated its global GST amount.
“Centrebet considers that the Sportsbet Judgement forms a reasonable basis to hold the view that the Federal Court at first instance is likely to determine the Centrebet Proceedings in favour of Centrebet Pty Limited,” said the company in a statement this morning.
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