Rio Tinto agrees to pay additional $613m to settle dispute with Australian tax office

theguardian.com:

Rio Tinto has agreed to pay the Australian taxation office an additional $613m to settle disputes over its financing arrangements and marketing hubs in Singapore, as part of what the ATO claims is one of the biggest tax settlements in Australian history.

The payment is on top of $378m the global mining giant had previously paid over the same dispute,bringing the total to almost $1bn in extra tax revenue. The ATO had been seeking about $1.2bn in tax and penalties.

Tax arrangements for the next five years were also locked in as part of the deal.

Rebecca Saint, an ATO deputy commissioner, said the settlement was “a very good outcome for the Australian tax system”.

“This means that additional profits from the sale of Rio’s Australian-owned commodities will be taxed in Australia in the years to come,” she said.

“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.”

Starting in 2017, the ATO hit Rio Tinto with a series of large tax bills over its marketing hub in Singapore, which sells iron ore and aluminium on behalf of the group. The bills date back to 2010.

Similar hubs are used by BHP and other miners, but their use became controversial in Australia in the mid-2010s amid a general crackdown by the ATO on multinational corporations.

The ATO also pursued Rio Tinto in 2021 over money it borrowed within the group to pay a dividend to shareholders in 2015.

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At the same time as striking a deal with the ATO, Rio Tinto has also settled a dispute with the Inland Revenue Authority of Singapore (Iras) over the treatment of the hubs.

It had been seeking