ATO clarifies tax treatment for TPG Telecom capital return and dividend

TPG Telecom Limited today announced the publication of the final Class Ruling (CR 2025/84) by the Australian Taxation Office (ATO), detailing the tax treatment for the $1.52 per share capital return and $0.09 per share unfranked special dividend paid to shareholders on November 24, 2025. The ruling confirms that the capital return is not considered a dividend for Australian tax purposes, while the unfranked special dividend of $0.09 per share is classified as a dividend and is assessable income.

The capital return, totaling $2,826,199,336.88, was debited from TPG’s share capital account and did not result in the cancellation of shares. The special dividend, amounting to $167,340,750.21, was debited from retained earnings. The ATO has also confirmed that sections 45A, 45B, and 45C of the ITAA 1936 do not apply to the capital return.

Shareholders are advised to review the full Class Ruling available on both the ATO and TPG websites and consult their professional tax adviser for specific circumstances. This clarity follows TPG Telecom's return of up to $3 billion from the proceeds of its enterprise, government, and wholesale fixed business sale completed on July 31, 2025.