Australia’s revenue collection office wants a multinational resources company to pay hundreds of millions of dollars in taxes.
The Australian Taxation Office (ATO) claims it caught Rio Tinto underpaying income tax dating back to the year 2015, when the business unsuccessfully tried to make multiple deductions.
“If an assessment is amended, and the amendment means an additional amount is payable, this amount becomes payable on the original due date for payment,” the ATO website said.
“Amounts not paid by the original due date accrue the general interest charge.”
Based on the latest calculations Rio could have to pay more than $406 million in amounts owed including interest.
“ATO has issued Rio Tinto Limited with amended assessments of $359.4m (US$279.8m) primary tax and $47.1m (US$36.7m) of interest,” the proponent said in a public statement.
Rio fights claim
However, the proponent is not interested in paying the full amount because it reportedly paid more than $8.4 billion in income tax for the relevant period.
The company vows to fight the assessments to the maximum extent of law because it believes there was no wrongdoing.
“Rio Tinto is confident of its position and will dispute the assessments,” the company said.
“The assessments relate to the denial of interest deductions on an isolated borrowing used to pay an intragroup dividend in 2015. This borrowing was repaid in 2018 [and] borrowing to fund the payment of a dividend is a normal commercial practice.”
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For now Rio agrees to pay half of the outstanding primary tax, and hopes the money will be returned if it wins the objections process.