ASX Release12 March 2007Letter of Intent Received from ATO - BBI...

ASX Release
12 March 2007
Letter of Intent Received from ATO - BBI to Challenge
After market close on Friday 9 March, Babcock & Brown Infrastructure (ASX: BBI)
received from the Australian Taxation Office (ATO) a Letter of Intent in relation to
ongoing discussions between the ATO and BBI regarding the deductibility of certain
payments made to the Queensland Government associated with BBI’s long term lease
of the Dalrymple Bay Coal Terminal (DBCT).
The ATO states in its Letter of Intent that it believes that the payments are not
deductible and that the ATO intends to issue amendments to BBI’s taxable position.
BBI strongly disagrees with the ATO’s position and considers the ATO’s position to be
incorrect at law. BBI will object to any notice of amended assessment that may be
issued by the ATO in accordance with its Letter of Intent. If such objection were to be
rejected, BBI intends to vigorously defend its position.
The amount of tax in dispute is approximately $68m together with exposure to interest
and penalty charges
The review by the ATO in relation to this matter was noted in BBI’s recent Half Year
Result and Placement presentation. Despite BBI remaining confident of the positions it
has taken, it is considered appropriate to update the market on the recent
developments in relation to this matter.
BBI does not believe that any amended assessment received will have a material
adverse effect on its financial position, although an amended assessment may be
significant to reported financial results for the period in which it issues, if the ATO’s
position is ultimately upheld by the courts.
BBI does not expect that any amended assessment will impact its distribution guidance
of not less than 14 cents for the 2007 financial year, nor its distribution guidance for the
2008 and 2009 financial years.
ENDS
Further Enquiries
Steven Boulton
Helen Liossis
Chief Executive Officer
Investor Relations Manager