Court also provided useful commentary on TOFA balance adjustment rules
The Federal Court on February 21, 2025, held in Tabcorp Maxgaming Holdings Limited v Commissioner of Taxation that the circumstances surrounding the termination of a taxpayer’s gaming licenses in Victoria did not create a “financial arrangement” subject to the Taxation of Financial Arrangements (TOFA) rules.
Although not decisive to the court’s holding, the court provided useful commentary on the TOFA balancing adjustment rules, which provide that a balancing adjustment amount can arise if, broadly, there is not alignment between the net financial benefits received and provided under a financial arrangement and the amounts that have been included in assessable income and/or allowed as a deduction. The court noted that the amounts included in income or allowed as a deduction are concerned with amounts deductible or assessable under the TOFA regime, rather than under other provisions. In addition, the court stated that an issuance of shares may be a provision of a financial benefit for the purposes of the balancing adjustment.
For more information, contact a KPMG tax professional in Australia:
Julian Humphrey | jrhumphrey@kpmg.com.au
Sagar Joshi | sjoshi10@kpmg.com.au