Rio Tinto’s Australian tax bill rises 30%

(Australian Associated Press)

 

Rio Tinto’s Australian tax bill increased by 30 per cent to $A4.9 billion ($US3.8 billion) last year, helped by higher iron ore prices.

The global mining giant says 75 per cent of its worldwide $A6.6 billion outlay on taxes and royalties was paid in Australia, with the largest payments being $A2.52 billion to the federal government and $A1.83 billion to Western Australia.

Rio’s next largest tax bills were paid in Canada and then Chile, at $US387 million ($A542 million) and $US318 million ($A445 million), respectively.

In the 12 months to December 31, 2017, the miner’s full year net profit jumped 90 per cent to $US8.76 billion ($A11.1 billion), as stronger prices drove revenue up 64 per cent to $US13.88 billion ($17.7 billion).

The average sales price for Rio’s ore jumped 20 per cent over 2017 to $US64.80 ($A90.72), encouraged by demand from Chinese steelmakers.

Stripping out royalties, the world’s second-largest iron ore producer paid $A2.44 billion in corporate tax – a figure well short of the $A3.9 billion that Commonwealth Bank claimed made it the country’s largest corporate tax payer in 2017.

Rio Tinto’s 2016 global tax bill was $US4 billion ($A5.3 billion) including the royalties.

In 2017, Rio’s group effective corporate income tax rate on underlying earnings was 28.2 per cent, the rate in Australia over the same period was 30.5 per cent, a slight lift from the 29.6 per cent of the previous year.

Rio Tinto has been a vocal supporter of the federal government’s push to cut corporate tax, with chief financial officer Chris Lynch welcoming the recent cut in the US corporate tax rate from 35 per cent to 21 per cent.

“Investment capital is internationally mobile and a competitive tax system is important to encourage the development of new projects,” Mr Lynch said in the company’s annual Taxes Paid report, released Tuesday.

Alongside its rival BHP Billiton, the miner has been under investigation by the Australian Taxation Office over the use of its Singapore sales centre to allegedly reduce local tax payments.

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