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The ATO welcomes arrangements with the company’s Singapore operations that stretch forward a decade.
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Ampol pays $157m to settle transfer pricing dispute
20 February 2023
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Ampol will pay $157 million to settle a tax dispute dating back almost a decade and has reached agreement with the ATO over pricing arrangements between its Singapore and Australian operations.
The settlement covers transfer pricing of refined products and crude oil between Ampol Singapore and Ampol Australia from 2014 to 2022, and on to 2033.
“With effect from 1 January 2023, Ampol has reorganised the functions performed by each of its Singaporean entities, resulting in the majority of earnings by Ampol Singapore from transactions with Ampol Australia being subject to corporate income tax in Australia at an overall rate of 30 per cent,” the company told the ASX.
Group chief financial officer Greg Barnes said: “We are pleased to have reached an agreement with the ATO and to have certainty over the future tax treatment of Ampol Singapore earnings. The changes minimise operational disruption, while ensuring we fairly meet our tax obligations in Australia.”
The ATO said the settlement showed its commitment to working with multinationals and a focus on procurement hubs by the Task Avoidance Taskforce.
“We are keen to ensure that procurement hubs are not used as a mechanism to shift profit from Australia by charging excessive prices for imported goods and services in an effort to reduce tax paid in Australia,” ATO Deputy Commissioner Rebecca Saint said.
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“The Tax Avoidance Taskforce has a strong focus of identifying, investigating and challenging those companies that don’t pay their fair share. The Australian community should be confident in the taskforce holding large taxpayers to account.”
The ATO said since 2016 it had raised tax liabilities of $30.6 billion in relation to multinationals and other large groups, including Rio Tinto, Google, BHP, Apple, ResMed, and Microsoft.
Ampol said the ATO had applied no penalities nor anti-avoidance provisions in its case, which stemmed from the company approaching the tax office in 2014.
Ms Saint said an crucial feature of the result was forward agreement to 2033.
“Locking in tax outcomes for the future has become an important feature of our settlements with multinationals as it provides us, taxpayers and the community with certainty that the multinational is meeting their tax obligations into the future, avoiding future disputes,” she said.
“We also continue to closely scrutinise the offshore structures and dealings of multinationals to ensure that that right amount of profit is being taxed in Australia under our controlled foreign company rules.”
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