AGL's deferred tax liabilities policy

The Parent Entity and its wholly owned Australian resident subsidiaries formed a tax consolidated group under Australian taxation law with effect from 25 October 2006 and are therefore taxed as a single entity from that date. AGL Energy Limited is the head entity in the tax consolidated group.

The members of the tax consolidated group have entered into a tax sharing and tax funding agreement. The tax funding agreement requires payments to/from the head entity equal to the current tax liability (asset) assumed by the head entity and any tax loss deferred tax asset assumed by the head entity. The payments are recorded as intercompany receivables/payables.

As a result of retrospective changes to the tax consolidation legislation enacted in June 2010, AGL has recognised a tax benefit of $85.5 million relating to tax deductions which are available for the tax value allocated to certain derivative assets in place at the time of the merger/demerger transaction with Alinta Limited in October 2006. These changes will result in a tax refund of $89.0 million and a deferred tax liability of $3.5 million. 

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