Rio Tinto resolves long-standing Australian tax dispute

Mining large Rio Tinto has ended its extended dispute with the Australian Tax Workplace (ATO) by agreeing handy over an additional A$613m ($423.22m) in unpaid taxes.

The settlement covers the interval between 2010 and 2021 and could be prolonged till 2026.

That is stated to be one of many largest such payouts in the nation’s historical past and comes on high of the A$378m paid by the agency over the identical dispute. 

Nonetheless, it’s beneath the A$1.2bn quantity sought by the ATO on this matter.

The watchdog’s Tax Avoidance Taskforce launched a probe into the miner over the pricing of gross sales of Australian merchandise equivalent to iron ore and aluminium to Rio Tinto’s Singapore centre.

The ATO alleged that the miner used Singapore as a advertising and marketing hub to shift income value billions of {dollars} and scale back Australian taxes.

The most recent settlement includes A$55m of curiosity, together with A$22m in penalties. Rio Tinto’s rival BHP resolved the same disagreement with the regulator in 2018.

As well as, the watchdog pursued Rio Tinto over cash it borrowed to pay a dividend in 2015. This dispute has additionally been now settled.

ATO deputy commissioner Rebecca Saint stated: “Rio has introduced that the settlement agreed to has secured roughly $1bn for the Australian neighborhood for previous years, over and above their tax returns initially filed. Maybe extra importantly, the settlement locks in future tax outcomes, offering certainty going ahead.

“Which means that extra income from the sale of Rio’s Australian-owned commodities will likely be taxed in Australia within the years to come back.”

Rio Tinto chief monetary officer Peter Cunningham acknowledged that the settlement supplied ‘certainty on future tax outcomes’ related to the agency’s Singapore advertising and marketing preparations and that the agency is ‘dedicated’ to its industrial actions within the city-state.

The Anglo-Australian miner additionally struck an settlement with the Inland Income Authority of Singapore (IRAS) over switch pricing to make sure that it’s not topic to double taxation.