Glencore denies reports of tax avoidance in Australia
Mining company Glencore has denied reports that it has evaded taxes in Australia for the last three years in spite of earning A$15bn.
The company said that it has paid A$8bn in royalties and taxes in the country over the last seven years.
An earlier report by the Sunday Morning Herald alleged that Glencore has evaded taxes by taking large and unnecessarily expensive loans from its associates in foreign countries.
“The company has sold 46% of its coal production to related companies, indicating transfer-pricing or profit-shifting.”
“At up to 9%, the interest rates on these A$3.4bn ($3.40bn) in loans were double what the company would have had to pay had it simply borrowed the money from the bank,” the report said.
The analysis, which was carried-out by an unidentified financial expert for the media group, also found that the company has sold 46% of its coal production to related companies, indicating transfer-pricing or profit-shifting.
According to the newspaper, out of the $4.3bn coal sales last year, nearly $2bn was made to other Glencore units. This represents an increase from the 27% in 2012.
The move resulted in the profits being shifted to Glencore’s parent company, which is based in the tax-haven of Switzerland.
A Glencore spokesman has termed the allegations as preposterous, reported Reuters.
The company said in a statement that it complies with all tax rules and regulations in Australia.
“The amount of tax our company pays is driven by the taxation legislation put in place by local, state and federal governments and is a matter of public policy,” the statement read.