by Mary Swire, Tax-news.com, Hong Kong
13 April 2017
Mining giant Rio Tinto has said that it paid USD4bn in taxes and royalties in 2016, with its total direct economic contribution amounting to USD35bn.
Rio Tinto has published its seventh annual “Taxes paid” report, which shows that the majority of its taxes in 2016 were paid in Australia (USD2.9bn). Elsewhere, it paid USD249m in taxes in Canada, USD215m in Mongolia, USD205m in Chile, USD102m in the US, and USD100m in South Africa. Corporate tax was the largest component of its tax payments, followed by government royalties, employer payroll taxes, and other taxes.
Rio Tinto has made direct tax contributions to governments worldwide of more than USD50bn since it started publishing a Taxes paid report in 2010.
In 2016, Rio Tinto’s effective corporate income tax on underlying earnings was 22.1 percent. It said this rate was reduced due to the recognition of a deferred tax asset in Mongolia. Excluding this item, the effective tax rate was 25.7 percent. In Australia, where Rio Tinto paid the bulk of its taxes, the effective corporate tax rate on Australian underlying earnings was 29.6 percent.
Rio Tinto Chief Financial Officer Chris Lynch said: “Rio Tinto is a major contributor to society and we are proud of the economic activity and wealth we generate through taxes, royalties, employee wages, payments to suppliers, and investment in communities. From both a global and local perspective, our Taxes paid report helps inform our stakeholders about the role we play and the impact we have in the community.”
“While many people know we produce materials that are essential to products they use every day – from telecommunications to transport – this report also helps the public better understand our total contribution to society.”
In his foreword to the report, Lynch expressed Rio Tinto’s support for a reduction in Australia’s headline company tax rate and warned that if the rate remained at 30 percent it would come at a cost to investment and jobs. He added that were the US to significantly lower its corporate tax rate and simplify its tax code, it would make the US a more attractive investment location.
Published at Wed, 12 Apr 2017 19:00:00 -0500