Rio Tinto will pay the Australian Taxation Office (ATO) $613 million in unpaid and disputed tax, following a mutual agreement between the two parties.
Rio Tinto Chief Financial Officer, Peter Cunningham, said the deal would settle any outstanding disputes and provide greater financial certainty in the coming years.
“We are glad to have resolved these long-standing disputes and to have gained certainty over future tax outcomes relating to our Singapore marketing arrangements,” Mr Cunningham said.
“Rio Tinto remains committed to our commercial activities in Singapore and the valuable role played by our centralised commercial team.”
The payment resolves Rio Tinto’s outstanding dues for the 12 years between 2010 and 2021 in addition to the $378 million already paid to the ATO following the authorities’ original amended assessment.
Rio Tinto initially contended the interest charged on an isolated borrowing used to pay an intragroup dividend in 2015.
Rio Tinto was issued amended assessments in respect to iron ore marketing in 2017 ($447m for the 2010 to 2013 years), for aluminium marketing in 2020 ($86m for the 2010 to 2016 years) and for the intragroup dividend financing matter in 2021 ($738m for the 2015 to 2018 years).
The agreements separately reached with the ATO and IRAS cover the transfer pricing related to the marketing of all products between Australia and Singapore, including iron ore and aluminium, for all historical years from 2010 to 2021 and the future period to 2026. The ATO settlement payment includes $55 million of interest and $22 million of penalties.
The resolution also settles a separate dispute concerning the pricing of transactions between Rio Tinto entities based in Australia and the group’s commercial centre in Singapore from 2010 to 2021, according to a statement from the company.
Rio Tinto has also reached agreement with the Inland Revenue Authority of Singapore (IRAS) in relation to transfer pricing for the same periods.
Reaching agreement with both tax authorities ensures Rio Tinto is not subject to double taxation.
