Rio Tinto, one of many multinationals facing political pressure over the use of schemes to reduce tax paid in Australia, has released detail on its use of tax havens.
Of the 600 companies which make up Rio, 17 are resident in tax havens. This is three fewer than in 2014.
Rio defines a tax haven as a country with a corporate income tax rate of 10% or less.
According to its 2015 Taxes paid report, Rio paid $US4.5 billion globally in taxes and royalties and spent almost $18 billion buying goods and services from suppliers around the world last year.
Australia got most of that, with Rio paying $US3.315 billion in tax last year, down from $US5.7 billion in 2014.
Rio Tinto in February posted a full-year net loss of $US866 million compared to net earnings the previous year of around $US6.5 billion.
The big miner has been cutting dividends and slashing costs to meet falling commodity prices, taking more than $6 billion of overheads out of the business since 2013.
CFO Chris Lynch says Rio had an average corporate income tax rate of 29.9% globally on underlying earnings over the past five years.
Rio says eight of the 17 companies in tax havens are dormant and either in liquidation or scheduled for liquidation.
Of the remaining nine, four are investment holding companies, three provide interest free loan funding to group operating companies, one holds investments for the benefit of a community in the region of a mine which has ceased operating, and one was established to provide in-country services prior to becoming part of the Rio Tinto group via acquisition.
“We were the first global mining house to provide comprehensive tax and economic contributions data and in this, our sixth taxes paid report, we are publishing more detail than ever before,” says CFO Chris Lynch.
“Debates about tax rates and contributions are best served when factual information is provided. This is what we have set out to do with our annual Taxes paid reports.”
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