Rio Tinto marketing ‘hub’ profits jump
Rio Tinto’s profit from controversial Singapore marketing hub surges almost 75pc, as it reveals extent of tax office stoush.
Rio Tinto’s profit from its controversial Singapore marketing hub surged almost 75 per cent to $US459m in 2019, according to the company’s latest report on its global taxation payments, as the mining giant revealed the extent of its latest dispute with the Australian Taxation Office.
Rio said on Wednesday it had paid $US4.8bn in corporate taxes across the globe in 2019, or $US7.6bn, including mining royalties, on underlying before-tax earnings of $US21.2bn.
The overwhelming majority of that total was paid in Australia, with the company’s annual tax payment report saying it had paid $US4.2bn in corporate taxes to the ATO and $US6.2bn in total including royalties on its West Australian iron ore operations.
Rio also put a figure on its latest dispute with the ATO over alleged transfer pricing on the sale of aluminium through its Singapore marketing hub, saying the tax office had lobbed a claim for an additional $86.1m in tax payments for the years from 2010 to 2016.
The claim comes on top of the ongoing dispute between Rio and the ATO over transfer pricing allegations on its WA iron ore operations, worth $447m.
Rio says it is disputing the latest ATO claim, formally lodged with the company in March 2020.
“The amended assessments for both the iron ore and aluminium matters do not relate to any tax avoidance schemes as confirmed by the Australian Taxation Office, and no penalties have been levied by the Australian Taxation Office,” Rio said.
The details of the aluminium sales dispute come as Rio also revealed before-tax profits made by the marketing hub lifted almost 75 per cent in 2019, from $US264m in 2018 to $US459m - worth about 4 per cent of Rio’s annual $US12.3bn before-tax profits for the year, double that of the previous year when Rio booked global pre-tax earnings of $US18.2bn.
Rio said the report showed it made a $US45.1 billion direct economic contribution to the countries in which it operates in 2019, taking the company’s direct economic contribution since 2015 to $US210 billion.
Rio Tinto chief financial officer Jakob Stausholm said the report highlighted the contribution the mining giant made to the communities in which it operates.
“The funds we provide to governments and communities support the basic infrastructure of society – bridges and roads, schools and hospitals – as well as other local development priorities, like job creation and skills training. Being transparent about where these payments go helps our stakeholders better understand how these funds may be used,” he said.
Rio boss Jean Sebastien Jacques will front shareholders - via webcast - at the company’s London annual meeting on Wednesday evening (AEST), and is expected to give an update on the company’s outlook and response the global coronavirus crisis.
Rio shares last traded at $90.65.
