Metcash Ltd (ASX:MTS) is disputing $48.8 million in amended tax assessments from the Australian Tax Office.
The grocery wholesaler says the assessments are in relation to a disputed tax liability from the sale of Action Stores that resulted in a net loss during the 2007 and 2008 financial years.
The total amount in dispute comprises primary tax of $32.9 million and interest and penalties of $15.9 million.
Metcash says it will challenge the assessment, lodge an objection and if necessary appeal the decision to the Federal Court.
The company will not record an expense to the assessments in its 2011 annual financial statements rather, label the assessments as a contingent liability.
In the six months to 30 October 2010, Metcash recorded a net profit of $113 million.
MTS Price at posting:
$3.98 Sentiment: None Disclosure: Held
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