JOHANNESBURG (miningweekly.com) – Iron-ore miner Fortescue Metals, which has publicly taken on multinational firms such as Rio Tinto and BHP Billiton over their marketing hubs in Singapore, on Wednesday downplayed the importance of a company it had set up in the low-tax island city state in early 2014.
Responding to an article in the Australian Financial Review, which provided details of the Singapore-incorporated and -domiciled Fortescue International Marketing, CFO Stephen Pearce explained that Fortescue had established the company as the entity by which it had intended to invest in the China Beijing International Mining Exchange. He added that the company had undertaken no other action.
Pearce insisted that Fortescue paid its full share of tax and royalties to Australia. “Fortescue confirms that it pays the applicable tax rates in the countries that it operates and that all income earned by those subsidiaries is then attributed back to Australia and applicable tax paid.”
“Fortescue is proud of its record of not transferring profits overseas,” he stated.
Pearce also accused Fortescue’s multinational competitors of feeding the media background on its Singapore investment company. “In doing so, they are trying to falsely insinuate that Fortescue is contemplating certain behaviour by multinationals that was the subject of the Senate inquiry and remains under the scrutiny of the ATO [Australian Tax Office],” he said in a media statement.
Rio Tinto and BHP Billiton are reportedly being audited by the ATO over the use of Singapore marketing hubs to allegedly reduce their tax bills. BHP Billiton has insisted that the trading office is for market reasons and not for tax purposes.
Earlier this month, Australia proposed new legislation to tighten tax loopholes that Treasurer Joe Hockey says will deal with 30 identified multinational companies, which are diverting profits earned in Australia away from Australia to no, or low tax, jurisdictions.