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The council had been forced to pay the charge in 2008 following an assessment by HMRC that the council had underpaid its landfill tax levy.
The council disputed the assessment from the outset but was obliged to settle the £866K bill while the formal appeal process ran its course.
Corporate Services convener Mark Salmond said he was delighted the council was to be fully reimbursed.
"I am delighted that the matter has been brought to such a positive conclusion as it has taken considerable time and effort to defend our position," said councillor Salmond.
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"The reimbursement of the full amount vindicates our decision to challenge the HMRC assessment. Landfill tax is an extremely complicated business and the council is committed to paying the tax due but this was an instance of an incorrect assessment of the amount owed so the decision had to be challenged.
"The full refund puts over £860K back into the county's coffers which is a very good outcome for the people of Angus."
Landfill tax is levied on waste deposited at landfill sites at either an active or inactive rate, depending on the classification and site use of the materials.
An HMRC visit to a council landfill site concluded that the council had wrongly categorised active and inactive materials on a number of occasions, resulting in an underpayment of landfill tax.
The council strongly disputed the decision from the outset and throughout a subsequent HMRC review but was nonetheless required to make a payment of £866K prior to the submission of a formal appeal.
During the appeal preparations it came to officers' attention that the court of appeal had ruled in favour of a case in England similar to the council's. A claim under this ruling was subsequently made and was accepted by the HMRC Commissioners. A full refund is to be issued.
(GK/BMcC)
