Swapping aluminum for copper will maintain China’s resources, group says
China depends on overseas imports for 60% of its aluminum resources as opposed to 70% of its copper resources.
Rio Tinto (ASX, LON, NYSE: RIO) has been hit with a A$379 million ($277.7m) bill as part of an ongoing dispute with the Australian Taxation Office (ATO) dating back to 2015.
The penalty relates to the denial of interest deductions on an isolated borrowing used to pay an intragroup dividend six years ago. This borrowing was repaid in 2018.
Rio received in March an amended assessment of A$$406.5 million. The sum consisted of A$359.4 million ($298m) in primary tax and A$47.1 million ($435m) in interest over money paid by its Australian unit to its United Kingdom entity.
The latest assessment asks the mining giant to pay A$352m ($257.9m) in primary tax and reduces the interest to A$27 million ($19.8m) from A$47m
The latest assessment asks the mining giant to pay A$352m ($257.9m) in primary tax and reduces the interest to A$27 million ($19.8m) from A$47m ($34m).
Rio Tinto, which rewarded investors in February with the biggest dividend in its 148-year history, said the penalties are on top of more than A$8.4 billion ($6.4m) of Australian income tax paid during the relevant period. It added that borrowing to fund the payment of a dividend was a normal commercial practice.
This is the second curveball thrown by the ATO to Rio’s new chief executive, Jakob Stausholm, since he assumed the top post in January.
The company and the ATO are already at loggerheads over two other matters that are now the subject of talks between Australian and Singapore tax authorities.
The tax authority believes Rio’s Australian subsidiaries did not charge an appropriate price for the aluminum they sold to Rio’s controversial Singapore marketing hub between 2010 and 2016.
