Contact Energy to take $7m one-off tax charge

The reduction in the corporate tax rate to 30% from 33% does not come into effect until July 2008. However, it will affect deferred tax balances as at June 30, 2007, as the rate used was expected to apply in years in which the balances are due to be settled, the company said.

The one-off charge represented the remeasurement of deferred tax asset balances held on the depreciated cost of electricity generation assets.

Deferred tax liabilities principally relating to revaluations of Contact's electricity generation assets reduced by $82m. Overall, Contact's net deferred tax liability at June 30 will be reduced by $75m.

Contact Energy announces its result on August 28.

Shares in Contact fell 7c to $8.83 in a weaker overall market.

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