JOHANNESBURG (miningweekly.com) – Mining major Rio Tinto is preparing to challenge amended assessments issued by the Australian Commissioner of Taxation outlining additional taxes due of A$447-million – A$379-million plus interest of A$68-million – for the calendar years from 2010 to 2013.
This is in addition to the A$25.5-billion of taxes and royalties Rio Tinto paid in Australia during that period.
“The issue in dispute is the pricing of certain transactions between Rio Tinto entities based in Australia and the group's commercial centre in Singapore.
Rio Tinto voluntarily approached the Australian Tax Office (ATO) more than a decade ago seeking to confirm its pricing arrangements, which Rio believed were in accordance with the internationally recognised Organisation of Economic Cooperation and Development guidelines and Australian domestic law.
“The transfer price in dispute is in line with an outcome agreed by the ATO for years prior to 2010,” the company said, stating that it will challenge the assessments.
“The assessments also result in double taxation. Rio Tinto will seek double taxation relief in accordance with the Australia-Singapore double tax treaty,” Rio added.
In the interim, Rio planned to pay 50% of the total amount to ATO this month.