TRANSFER PRICING – AUSTRALIA

BHP loses epic tax battle

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Original article by Nick Evans
The Australian – Page: 20 : 12-Mar-20

The High Court has ruled in the Australian Taxation Office’s favour in a long-running tax dispute with BHP over its marketing hub in Singapore. BHP will have to pay an additional $US87m ($125m) in tax for the income years 2006 to 2018 after the court ruled that its Australian and British arms are ‘associates’ for tax purposes. A spokesman has noted that the resources group has paid some $71bn in taxes and royalties in Australia over the last decade.

CORPORATES
BHP GROUP LIMITED – ASX BHP, AUSTRALIAN TAXATION OFFICE

ATO probes Rio on its pricing of aluminium

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Original article by Peter Ker
The Australian Financial Review – Page: 13 : 25-Feb-20

Rio Tinto’s Australian aluminium business is the subject of a transfer pricing assessment by the Australian Taxation Office. It is understood that the ATO’s investigation is looking at Rio’s Boyne aluminium smelter in Queensland, and the manner in which transactions between Boyne and Rio’s Singapore marketing hub have been structured in recent years. The ATO’s investigation comes at a time when Rio is holding discussions with governments concerning a possible rescue package for its loss-making Australian aluminium smelters. The ATO also launched a $212 million transfer pricing claim against Alcoa in December.

CORPORATES
RIO TINTO LIMITED – ASX RIO, AUSTRALIAN TAXATION OFFICE, ALCOA OF AUSTRALIA LIMITED

Glencore beats ATO in transfer pricing battle

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Original article by John Durie
The Australian – Page: 20 : 4-Sep-19

The Australian Taxation Office may appeal a Federal Court ruling in favour of mining giant Glencore over a transfer pricing dispute. The case centred on the price that Glencore’s offshore trading arm paid for copper from its Cobar mine in New South Wales. The ATO contended that the transaction should have been done at arm’s length. The ruling may have implications for other transfer pricing investigations being undertaken by the ATO.

CORPORATES
GLENCORE PLC, GLENCORE AUSTRALIA PTY LTD, AUSTRALIAN TAXATION OFFICE, FEDERAL COURT OF AUSTRALIA

BHP acts on Singapore loophole

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Original article by Paul Garvey
The Australian – Page: 21 : 21-Nov-18

The case for abolishing BHP’s dual-listed structure has strengthened after the resources group agreed to transfer full ownership of its Singapore trading hub to its Australian division. BHP will do so as part of a settlement with the Australian Taxation Office regarding the payment of back taxes associated with the trading hub. The settlement is likely to significantly reduce the cost to BHP of reverting to a single primary listing on the Australian sharemarket.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, AUSTRALIAN TAXATION OFFICE, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, SHAW AND PARTNERS LIMITED, ELLIOTT MANAGEMENT CORPORATION, TAX JUSTICE NETWORK

BHP to pay $529m bill after taxman wins trading hub case

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Original article by Paul Garvey
The Australian – Page: 17 & 20 : 20-Nov-18

BHP Billiton has agreed to pay $529 million in back taxes as part of a settlement with the Australian Taxation Office concerning its Singapore trading hub. There had been claims that BHP was using the hub to reduce its tax payments in Australia, with the settlement relating to its earnings between 2013 and 2018. Previously, 42 per cent of the hub had been owned by BHP’s UK arm, but its Australian arm will now assume 100 per cent ownership. BHP CFO Peter Beaven said he is pleased that the issue has been resolved, while he noted that BHP had already paid over $75 billion in Australian taxes and royalties between 2013 and 2018.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, AUSTRALIAN TAXATION OFFICE, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC

Rio tax take soars, but ATO sore points remain

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Original article by James Thomson
The Australian Financial Review – Page: 14 : 10-Apr-18

Rio Tinto has revealed that it paid a total of $A4.9bn in taxes and royalties in Australia during 2017, compared with $A3.9bn in 2016. The Federal Government’s share of taxes paid by Rio Tinto in 2017 was $A2.4bn, while its Western Australian counterpart received $A1.8bn. Rio Tinto continues to attract scrutiny over its use of a marketing hub in Singapore, where its total tax paid was just $A31m in 2017.

CORPORATES
RIO TINTO LIMITED – ASX RIO, AUSTRALIAN TAXATION OFFICE, BHP BILLITON LIMITED – ASX BHP

ATO’s $75bn crackdown on debt

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Original article by Ben Butler
The Australian – Page: 13 : 18-Dec-17

The Australian Taxation Office is understood to have reached settlements with 12 multinational companies in regard to related party debt. The value of the borrowings in question is put at $A75 billion. ATO Deputy Commissioner Jeremy Hirschhorn says the term of the settlements provide for future tax revenues, as well as resolving past disputes. He says the ATO is now working with an additional 60 taxpayers, with the value of their related party debt accounting for around $A120 billion.

CORPORATES
AUSTRALIAN TAXATION OFFICE, FEDERAL COURT OF AUSTRALIA, CHEVRON AUSTRALIA PTY LTD

ATO eyes legal fight against BHP, Rio hubs

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Original article by Nick Tabakoff
The Australian – Page: 17 & 20 : 5-Dec-17

Tax commissioner Chris Jordan says the Australian Taxation Office may take BHP Billiton and Rio Tinto to court over their use of Singapore marketing hubs. Jordan claims that the use of such hubs is reducing Australia’s tax base, and getting some "judicial guidance" on their use may be the best way forward. BHP and Rio Tinto are both embroiled in large tax disputes with the ATO over their use of the marketing hubs.

CORPORATES
AUSTRALIAN TAXATION OFFICE, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

New tax bill for Chevron over inter-company loans

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Original article by Matt Chambers
The Australian – Page: 19 : 8-Jun-17

Chevron Australia’s financial accounts show that it made a net loss of $US541m in 2016, compared with a $US165m profit in 2015. The local subsidiary of US energy giant Chevron did not pay income tax and petroleum resource rent tax in 2016. The accounts also indicate that the Australian Taxation Office has issued amended assessments regarding interest deductions on intercompany loans for the period covering 2009 to 2013. This is in addition to the additional tax bill of $A340m for the period from 2003 to 2007.

CORPORATES
CHEVRON AUSTRALIA PTY LTD, CHEVRON CORPORATION, AUSTRALIAN TAXATION OFFICE, FEDERAL COURT OF AUSTRALIA

Chevron tax ruling to ‘hit investment’

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Original article by Matt Chambers
The Australian – Page: 22 : 3-May-17

Chevron’s chief financial officer, Patricia Yarrington, has told investors in the US that the oil and gas group may appeal a Federal Court of Australia ruling on the tax status of a $A2.5bn inter-company loan. She warned that the ruling will have implications for international transfer pricing guidelines, while it is likely to impact on future investment in Australia. However, Chevron’s Stephen Green has welcomed the findings of a review which recommended that any changes to the Petroleum Resource Rent Tax should not be retrospective.

CORPORATES
CHEVRON CORPORATION, CHEVRON AUSTRALIA PTY LTD, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN TAXATION OFFICE