IGO suspends annual dividends from Tianqi JV amid market downturn
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Miner and trader Glencore has won a dispute with Australia’s tax office after a court ruled it had paid the correct amount of tax on purchases of copper concentrate from a mine that it owns in New South Wales state.
Australia’s tax commissioner alleged that Glencore’s Swiss head office had failed to pay market rates for the copper it bought from its CSA mine in 2007, 2008 and 2009, and raised its assessment of tax owed by A$92.6 million ($62.5 million).
However, the Federal Court of Australia found that Glencore had established that the price it paid for the copper concentrate was “within an arm’s length range”, according to a judgement on Tuesday.
The long-running court case began after Glencore appealed the result of the tax office’s audit in 2011-2013.
The long-running court case began after Glencore appealed the result of the tax office’s audit in 2011-2013
“Glencore welcomes the Federal Court decision in the matter relating to the pricing of copper concentrate sales by our CSA Mine between 2007 and 2009,” the company said in a statement to Reuters.
Global tax authorities have in recent years cracked down on so-called “transfer pricing” when multinationals sell to their parent or subsidiaries abroad at lower prices, potentially avoiding taxes if they lead to the declaration of lower earnings or even losses.
The Australian Taxation Office said it would consider the decision and whether to appeal.
“The most significant issue in multinational taxation is ensuring that the Australian arms of companies have arm’s length dealings with offshore related parties,” Deputy Commissioner Jeremy Geale said.
“Transfer pricing rules ensure these transactions are priced fairly and that multinational companies do not underpay tax in Australia,” he said in a statement to Reuters.
Glencore is still facing a $680 million tax demand from British authorities linked to transfer pricing that it said in February it would “vigorously contest”.
The world’s biggest listed miner BHP late last year signed an agreement with the Australian Taxation Office to settle a transfer pricing dispute regarding its marketing operations in Singapore.
($1 = 1.4806 Australian dollars)
(By Melanie Burton; Editing by Richard Pullin and Muralikumar Anantharaman)
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