Home Accounting and Auditing Glencore wins £51m transfer pricing tax appeal

Glencore wins £51m transfer pricing tax appeal

236
0

Anglo-Swiss multinational mining group Glencore has won a A$92m (£51m) victory in a long-running transfer pricing dispute with the Australian Taxation Office (ATO), reports Accountancy Daily.

Australian judges ruled in the FTSE 100 company’s favour over a tax bill for one of its Australian mines.

The claim centred on whether or not Glencore’s Swiss head office had paid market rates for processing the copper it bought from its CSA mine in New South Wales in 2007, 2008 and 2009.

Now the Federal Court of Australia has found that dealings between Swiss-based Glencore International and an Australian subsidiary did not breach transfer pricing rules in relation to the sale and purchase of copper concentrate in the 2007 to 2009 years.

The ATO argued that amendments made to an agreement between Glencore International and its Australian subsidiary were not arm’s length dealings. The tax authority had issued Glencore with three sets of amended assessments that arose as a consequence of this, totalling A$92m.

However, the court rejected aspects of the Commissioner’s interpretation of the relevant transfer pricing rules, and found that the terms operating between the Australian copper mine and its Swiss trader parent ‘were within an arm’s length range’.

The ATO said it will consider the decision and whether an appeal is appropriate.

Jeremy Geale, ATO deputy commissioner, said: ‘The most significant issue in multinational taxation is ensuring that the Australian arms of companies have arm’s length dealings with offshore related parties. Transfer pricing rules ensure these transactions are priced fairly and that multinational companies do not underpay tax in Australia.’