Rio Tinto statement on penalty assessment

Rhea-AI Summary

On March 2, 2021, the Australian Taxation Office (ATO) issued amended assessments to Rio Tinto regarding denied interest deductions linked to a 2015 dividend payment. The ATO imposed penalties of A$352 million (US$257.9 million) while reducing the original interest assessment to A$27 million (US$19.8 million). Rio Tinto plans to dispute these assessments, having already paid 50% of the primary tax as part of the objections process. The company reported paying over A$8.4 billion (US$6.4 billion) in Australian income tax during the relevant period.

Positive

• None.

Negative

• Penalties of A$352 million (US$257.9 million) assessed by the ATO.
• Potential financial strain from ongoing tax disputes.

MELBOURNE--(BUSINESS WIRE)-- On 2 March 2021 the Australian Taxation Office (ATO) issued Rio Tinto Limited with amended assessments related to the denial of interest deductions on an isolated borrowing used to pay an intragroup dividend in 2015. The borrowing was repaid in 2018.

The ATO has today issued further assessments in relation to the same transaction levying penalties of A$352m (US$257.9m) and reducing the original interest assessment from A$47m to A$27m (US$19.8m).

Borrowing to fund the payment of a dividend is a normal commercial practice. Rio Tinto is confident of its position and will dispute the primary tax and penalty assessments. In accordance with the usual practice Rio Tinto 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.

Rio Tinto Limited paid more than A$8.4bn (US$6.4bn) of Australian income tax during the relevant period.

Please direct all enquiries to media.enquiries@riotinto.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20210915006227/en/

Media Relations, UK

Illtud Harri

M +44 7920 503 600

David Outhwaite

M +44 7787 597 493

Media Relations, Americas

Matthew Klar

T +1 514 608 4429

Investor Relations, UK

Menno Sanderse

M: +44 7825 195 178

David Ovington

M +44 7920 010 978

Clare Peever

M +44 7788 967 877

Media Relations, Australia

Jonathan Rose

M +61 447 028 913

Matt Chambers

M +61 433 525 739

Jesse Riseborough

M +61 436 653 412

Investor Relations, Australia

Natalie Worley

M +61 409 210 462

Amar Jambaa

M +61 472 865 948

Rio Tinto plc

6 St James’s Square

London SW1Y 4AD

United Kingdom

T +44 20 7781 2000

Registered in England

No. 719885

Rio Tinto Limited

Level 7, 360 Collins Street

Melbourne 3000

Australia

T +61 3 9283 3333

Registered in Australia

ABN 96 004 458 404

Category: General

Source: Rio Tinto

FAQ

What is the recent tax issue faced by Rio Tinto as of March 2021?

Rio Tinto is disputing amended assessments from the ATO regarding denied interest deductions on a 2015 dividend payment.

What penalties did Rio Tinto incur from the Australian Taxation Office?

Rio Tinto faces penalties amounting to A$352 million (US$257.9 million) related to the tax issue.

How much did Rio Tinto pay in Australian income tax during the relevant period?

Rio Tinto paid over A$8.4 billion (US$6.4 billion) in Australian income tax.

Has Rio Tinto accepted the ATO's assessment of interest deductions?

No, Rio Tinto is confident in its position and plans to dispute the primary tax and penalty assessments.

What was the original interest assessment imposed on Rio Tinto by the ATO?

The original interest assessment was A$47 million, which was later reduced to A$27 million.