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Glencore wins transfer tax dispute over Australian copper payments

Glencore wins transfer tax dispute over Australian copper payments

File Photo: The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar November 20, 2012. REUTERS/Arnd Wiegmann

MELBOURNE: Global mining and trading giant Glencore has won a dispute with Australia's Taxation Office after a judge found it had paid the correct amount of tax on purchases of copper concentrate from a mine that it owns in New South Wales state.

Australia's Tax Commissioner alleged that Glencore's Swiss head office had failed to pay market rates for the copper it bought from its CSA mine in 2007, 2008 and 2009, and raised its assessment of tax owed by A$92.6 million (US$62.5 million).

However, the court found that Glencore had established that the price it paid for the copper concentrate was "within an arm's length range," according to a judgement handed down on Tuesday.

The long-running court case began after Glencore appealed the result of the ATO's audit in 2011-2013.

"Glencore welcomes the Federal Court decision in the matter relating to the pricing of copper concentrate sales by our CSA Mine between 2007 and 2009," the company said in a statement to Reuters.

Global tax authorities have in recent years cracked down on so-called "transfer pricing" when multinationals sell to their parent or subsidiaries abroad at lower prices, potentially avoiding taxes if they lead to the declaration of lower earnings or even losses.

The Australian Taxation Office had no immediate comment.

Glencore is still facing a US$680 million tax demand from British authorities linked to transfer pricing that it said in February it would "vigorously contest."

The world's biggest listed miner BHP late last year signed an agreement with the Australian Taxation Office to settle a transfer pricing dispute regarding its marketing operations in Singapore.

Source: Reuters/nc


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