• Underpayment of vehicle registration duty identified in relation to sales across Australia
• Underpayments relate to duty not calculated on value of optional equipment fitted to new and used motorcycles
• MTO committed to resolving issues and engaging with revenue authorities to remit correct duty, interest and any penalties

MotorCycle Holdings Limited (ASX: MTO) has advised that, through its focus on operational excellence, it has identified an underpayment of vehicle registration duty in relation to vehicles sold by MTO in potentially each State and Territory in which it conducts business. The underpayments relate to duty that was not calculated, collected and remitted on the value of certain optional equipment fitted to both new and used motorcycles sold. MTO is making immediate system and process improvements to address this issue and will continue to engage proactively with the relevant revenue authorities to ensure the correct amount of duty, including applicable interest and penalties, is remitted. For used motorcycles, both MTO and the customer are legally liable for the vehicle registration duty, while for new motorcycles, customers are legally liable but MTO has agreements to assess and collect the duty. MTO will not seek payment from customers where there were erroneous estimates of duty. The aggregate exposure remains subject to further analysis, but based on data reviewed, the Board estimates the potential underpayments for 2016 to now to be in the range of $2.5M to $3.5M, with potential interest of $1.1M to $1.5M. MTO has made voluntary disclosures to the relevant authorities and considers this may assist in no significant penalties being imposed, although the outcome is uncertain. A provision will be made in the half year FY26 accounts, and MTO expects to fund the payments through existing cash reserves and operating cash flows.