Thursday April 06, 2017 20:48
Australian Taxation Office (ATO) has slapped mining giant Rio Tinto (ASX, LON:RIO) with an additional $337 million tax bill over transfer pricing of commodities to its Singapore marketing hub.
“The Australian Commissioner of Taxation has issued amended income tax assessments to Rio Tinto for the calendar years 2010 to 2013, requiring the company to pay additional tax of A$379 million ($286 million) plus interest of A$68 million ($51 million), a total of A$447 million ($337 million),” the mining company said in a press release.
The miner already paid $19.2 billion in taxes and royalties to the Australia government during that period.
The tax bill being disputed involves issues surrounding pricing of several transactions between Rio Tinto entities based in Australia and the Group’s commercial centre in Singapore.
Rio Tinto said it will fight ATO’s tax bill, but will pay 50% of the total by the end of April.
The mining company noted in the release that the amended assessment was not related to any tax avoidance schemes.
Rio Tinto is one of many multinational companies being investigated by the ATO for its past use of Singapore marketing hubs to reportedly lower taxes. Others include mining rival BHP Billiton and tech giants Google and Apple.
ATO said it suspects some miners are selling commodities to their own companies at a lower price in order to move profits to locations known as tax havens.
Rio Tinto said its pricing is in “accordance with the internationally recognized OECD guidelines and Australian domestic law,” and added that ATO’s assessments result in double taxation.