16th Sep 2021 09:49
(Alliance News) - Rio Tinto PLC on Thursday said it will be appealing an Australian tax ruling which saw the global mining heavyweight slapped with a fine worth around USD258 million.
London-based Rio Tinto was served with an AUD352 million fine by the Australian Taxation Office at the beginning of March this year.
But on Thursday, the ATO requested Rio to pay around AUD27 million as part of the original interest assessment, which the authorities reduced from AUD47 million.
The original fine was for interest deductions on borrowing that Rio made to pay an internal dividend in 2015. The borrowing was repaid in 2018, Rio noted.
"Borrowing to fund the payment of a dividend is a normal commercial practice. Rio Tinto is confident of its position and will dispute the assessments," the miner said.
Rio said that it has paid 50% of the primary tax up-front as part of the objections process. "Penalties and interest are not required to be paid until the primary tax matter is resolved," it added.
Rio shares fell 1.8% to 5,125.00 pence each in London on Thursday morning.
In early March, the ATO issued the miner with amended assessments of AUD359.4 million primary tax and AUD47.1 million of interest, which has now been reduced.
This was on top of more than AUD8.4 billion of Australian income tax paid during the same period, the company highlighted.
In February, Rio Tinto declared a record final dividend as it shrugged off controversy and Covid-19 to post a hefty profit rise for 2020.
Revenue in 2020 was up 3.3% to USD44.61 billion from USD43.17 billion. Pretax profit surged 38% to USD15.39 billion from USD11.12 billion.
With a 309 US cents final ordinary dividend and 93 cents special dividend, the miner raised its annual dividend by 26% to 557.0 cents from 443.0 cents.
For Rio Tinto, 2020 will be best remembered for the outcry and regulatory scrutiny that followed the miner blowing up a 46,000-year-old Aboriginal heritage site to expand the Pilbara iron ore mine in Western Australia. Following the incident, which took place in May, Jean-Sebastian Jacques resigned as chief executive, replaced by Jakob Stausholm, who had been chief financial officer.
By Greg Roxburgh; [email protected]
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