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AKIPRESS.COM - Rio Tinto Group has been accused by a Dutch non-profit group of avoiding about $700 million in taxes related to its Oyu Tolgoi copper mine in Mongolia. The company denied the allegations, Bloomberg reported.
Rio and its Canadian subsidiary Turquoise Hill Resources Ltd. used so-called mailbox companies in Luxembourg and the Netherlands to fund the development of the mine in Mongolia, the Centre for Research on Multinational Corporations said in a report Wednesday. The company avoided $470 million in Canadian taxes through the vehicles and $230 million in Mongolian taxes, the group known as SOMO said.
“The flawed SOMO report contains a number of unsubstantiated and incorrect allegations regarding tax,” London-based Rio said in an emailed statement. Oyu Tolgoi “is one of Mongolia’s largest taxpayers and is paying its fair share of tax,” having paid more than $1.8 billion in taxes and royalties between 2010 and 2017, the company said.
The SOMO report comes at a time when tax avoidance measures have become a political flashpoint, especially for the world’s biggest tech companies. Structures with names with like “Double Irish” and “Dutch Sandwich” have been used by companies to shield the majority of their international profits from taxation.