Tabcorps Star City Casino Battling Australian Tax Office

TABCORP's Star City casino in Sydney is battling the Australian Taxation Office over a $120 million tax bill in the latest dispute over decade-old deductions claimed by a major Australian corporation.

Lawyers from Allens Arthur Robinson argued the case was complicated by the fact that senior executives involved at the time were no longer with the company.

Tabcorp confirmed it was disputing the assessments but it said it could not comment further. Tabcorp is the latest big company to go head to head with Tax Office over the validity of tax deductions.

Last week toll-road operator Transurban scored a victory against the Tax Office with the High Court ruling that concession fees paid by Transurban since 1996 to the Victorian Government in relation to its CityLink toll road were a legitimate tax deduction. It will now be able to claim deductions on $3.2 billion worth of payments.

Last year BHP Billiton said it would fight a bill of almost $1 billion for bad-debt write-downs from the early 2000s. Rio Tinto also declared it would dispute a $456 million bill related to the purchase of franking credits in 1997.

The Sydney Harbour Casino opened in September 1995 but the current Star City was not completed until 1997. Tabcorp purchased Star City and majority management right in 1999.