SYDNEY (Reuters) - Glencore, one of the world’s biggest mining and trading houses, on Friday denied claims by an Australian newspaper that its coal division had paid no taxes in Australia in the past three years on income of A$15 billion ($14.10 billion).
The Sydney Morning Herald reported that Glencore Plc cut its tax exposure by claiming tax breaks on expensive loans that were not necessary. Interest rates on the loans, extended by Glencore’s associates overseas, were up to double what it would have had to pay banks, the newspaper said.
“At up to 9 percent, the interest rates on these A$3.4 billion ($3.40 billion) in loans were double what the company would have had to pay had it simply borrowed the money from the bank,” according to the report.
A Glencore spokesman said the claim that no income tax was paid over the last three years was “preposterous.”
Glencore, which acquired fellow Swiss-based resources company Xstrata last year in a $36 billion takeover, is one of Australia’s biggest producers of coal and also a major miner copper, zinc and other commodities.
“Glencore complies with all tax rules and regulations in Australia and in each jurisdiction where we operate,” the company said in a statement in response to the article.
“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,” adding that it paid more than A$8 billion in royalties and taxes in Australia over the last seven years. The article cited analysis for The Sydney Morning Herald’s publisher, Fairfax Media, of Glencore’s books by an unnamed source “personally concerned at the rampant levels of tax avoidance by multinationals operating in Australia” for its findings.
($1 = 1.0639 Australian Dollars)
Reporting by James Regan; Editing by Ryan Woo