Login
iscover
Outcome in the 10-year dispute is a win for the Task Avoidance Taskforce, the Tax Office says.
Newsletter
ATO reaches $1bn settlement with Rio Tinto
22 July 2022
•
12 minute read
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The ATO has reached a $1 billion settlement with mining giant Rio Tinto in a longstanding tax dispute over its Singapore hub.
ATO deputy commissioner Rebecca Saint said the settlement was one of the largest in Australia’s history and it also locked in future tax outcomes.
“This settlement is a very good outcome for the Australian tax system,” said Ms Saint.
“Even prior to this settlement, Rio has been one of Australia’s largest payers of income tax for many years, with a strong track record of engaging with the ATO in relation to its tax affairs, albeit with some areas of dispute.”
Rio Tinto said agreement was reached on the pricing of transactions between its Australian entities and its commercial centre in Singapore between 2010 to 2021.
It would pay additional tax of $613 million for 2010 to 2021, in addition to $378 million paid in the original amended ATO assessments. The settlement also includes $55 million in interest and $22 million in penalties.
==
==
Ms Saint said the ATO win was a reflection of hard work and would provide certainty on Rio Tinto’s future tax outcomes.
“The resolution of these matters means that ordinary Australians can have confidence that even the biggest companies are held to account to pay their tax due,” said Ms Saint.
“This result was delivered through the expertise of the ATO’s Tax Avoidance Taskforce.”
“Many ATO staff have worked for the best part of a decade on these audits to deliver an outcome for the Australian community that strengthens the tax system.”
The ATO said the positive outcome was a reflection of the compliance programs funded by the Tax Avoidance Taskforce as well as the robust tax laws which enabled the ATO to scrutinise activities and address multinational tax avoidance.
“This settlement reinforces the importance of Australia’s world-leading anti-transfer mispricing rules and a tax administrator properly resourced with the capabilities to deal with this type of dispute,” said Ms Saint.
“The complexity of properly understanding the global affairs of multinationals, and the true drivers of profitability, can take years of rigorous investigation.”
“This is the case even when the multinational is fully engaged, shares information and is motivated to resolve the issue, such as with this settlement.”
The ATO said that to the end of April, the Tax Avoidance Taskforce had helped raise $26.3 billion in tax liabilities and collect $14.9 billion in cash.
“Australia has one of the best tax performance rates in the world overall, but in particular the large market,” said Ms Saint.
“The success of the Tax Avoidance Taskforce has helped us ensure that compliance rates in the large market have reached 92 per cent of tax paid voluntarily, and 96 per cent after compliance activities.”
You are not authorised to post comments.
Comments will undergo moderation before they get published.