Rio Tinto denies allegations of $700m tax evasion on Mongolian mines

SMM, Jan. 31 / PRNewswire-FirstCall-Asianet / Rio Tinto has been accused by a Dutch non-profit company of tax evasion in a project with Mongolia's Oyu Tolgoi copper mine, involving $700m. Rio Tinto unilaterally denied the allegations.

Rio Tinto and its Canadian subsidiary, Turquoise Hill Resources Ltd., reported on Wednesday that Rio Tinto and its Canadian subsidiary, Rio Tinto, and its Canadian subsidiary, Rio Tinto, So-called "mailbox companies" have been used in Luxembourg and the Netherlands to provide financial support for mining development in Mongolia. In this way, Rio Tinto avoided $470 million in Canadian vehicle taxes and $230 million in Mongolian taxes.

Rio Tinto's 2016 global tax chart ($2.899 billion for Australia, $249 million for Canada, $2.15 for Mongolia and $621 million for other countries)

"the flawed SOMO report contains unsubstantiated and incorrect tax allegations," London-based Rio Tinto said in an emailed statement. "Oyu Tolgoi is one of Mongolia's largest tax items and is paying reasonable taxes," the company said. The company said it paid more than $1.8 billion in taxes and royalties between 2010 and 2017. The SOMO report comes as tax avoidance has become a political trigger, especially for the world's largest technology companies.

Rio Tinto uses the names "Double Irish (double Irish Hamburg" and "Dutch Sandwich (Dutch Sandwich" to protect most of their international profits from taxes.

Rio Tinto, the world's second-largest mining company, has run into some difficulties in Mongolia, where politicians claim the country has benefited little from development. Rio Tinto's chief executive, Jean-Sebastian Jacques, flew to Mongolia last week to negotiate with the country's prime minister with a view to easing relations and reducing the cost of expanding the Oyu Tolgoi mine project.

A large number of Oyu Tolgoi copper and gold deposits were discovered in Mongolia's Gobi Desert in 2001. in 2012, Turquoise Hill Resources Ltd, Rio's Canadian subsidiary, co-owned the right to use the Oyu Tolgoi project with the Mongolian government, which accounted for 34 per cent and Turquoise Hill Resources Ltd 66 per cent. Oyu Tolgoi's "equity and financing structure is agreed in advance with the governments of Canada and Mongolia, and the tax results are consistent with those of Australia, Canada, Chile and the United States." Rio Tinto said in an emailed statement.

Earlier, Rio Tinto said in a report in April that it had paid $215 million in taxes to Mongolia in 2016 and about $4 billion to governments around the world.

Rio Tinto said in a statement that, Oyu Tolgoi's underground expansion plan would be launched by 2020, when shareholders would invest about $12 billion, while the Mongolian government has so far received only any return.

SOMO is a non-profit organization funded by the Government of the Netherlands and the European Union, which investigates transnational corporations.

Note: the tax avoidance methods of "double Irish Hamburg" and "Dutch Sandwich" have been used by Google and Apple before. in short, Irish and Dutch registered companies have less tax revenue. For more information, please refer to the high likes on Zhihu to answer https://www.zhihu.com/question/20209496.