The Live Wire



Press Release

Rio Tinto and ATO settle franking credits dispute

14 June 2007

Rio Tinto and the Australian Taxation Office (ATO) have reached an agreement to settle their outstanding dispute regarding tax assessments imposed on 1997 franking credit transactions.

Details of the dispute were disclosed to the Australian Securities Exchange on 16 July 2003 and, most recently, in Rio Tinto's 2006 Annual report and financial statements (Note 33).

As at the 2006 year end, the net amount in dispute, including additional tax, penalties and interest, stood at approximately A$515 million (US$407 million at the year end exchange rate). As required by Australian tax law and practice, in August 2003 Rio Tinto made a part payment of A$164 million pending resolution of the ATO's claims.

The agreed settlement, made without any concessions or admissions of liability by either Rio Tinto or the ATO, will involve the ATO repaying the amount of A$42 million (US$35 million)* from Rio Tinto's part payment of A$164 million; the ATO retaining the balance of A$122 million (US$103 million)*, and Rio Tinto cancelling net franking credits of A$48 million. The settlement will have no impact on the expectation that Rio Tinto Limited will be in a position to pay fully franked dividends for the reasonably foreseeable future.

The settlement will result in a charge to earnings of approximately US$46 million*, which will be reflected in Rio Tinto's 2007 half year results as an item included in underlying earnings.

* based on an exchange rate of A$1.00/US$0.8406



Press releases, papers and documents published on this page are the intellectual property of an organisation unrelated to Central Lobby. We promote their parliamentary and political campaigning activities as they are subscribers to the Central Lobby service.

As such, Central Lobby does not edit, endorse, or attempt to balance the opinions expressed on this page. The content of press releases and other such types of content are the responsibility of the originating organisation.

More from Dods

© Dods Parliamentary Communications Ltd