Half a billion into NSW Treasury from Glencore's Newcastle export coal royalties

GLENCORE'S latest Payment to Governments report says the mining giant paid $US374 million ($542 million) in royalties last year for coal shipped through Newcastle, as part of $US1.68 billion ($2.4billion) in Australian taxes and $US2.9 billion ($4.2 billion) in total payments to Australian governments.

As the table above shows, the $US1.68 billion was part of $US4 billion in global payments, as recognised by a European Union accounting directive used by Glencore in laying out its tax bills.

When other payments to governments are taken into account, the overall figure swelled to $US7.7 billion.

A Glencore spokesperson said the report showed the company paid more tax in Australia than anywhere else.

It had nine coal mining operations in NSW and six in Queensland.

The report said Glencore had 150 operations in 35 countries, employing about 160,000 people.

Glencore, like other multinational companies, has been accused of artificially minimising its taxes.

The first in this series of reports, published in 2015, said the company knew its "license to operate" depended on "sustainability", which included "acting responsibly over our tax affairs".

The 2019 report says: "In recent years, governments, the media and the public at large have raised legitimate questions in connection with the alleged diversion of business profits by multinational enterprises into tax havens mainly in order to avoid paying local taxes."

It says Glencore did not do this, saying: "Our Group tax policies commit us to not engineer structures or transactions that exploit transfer pricing rules by artificially 'transferring' profit into lower tax jurisdictions."

Given the "legitimate concern of tax administrations to collect the full amount due to them", the report said Glencore's "transfer pricing should be subject to careful scrutiny and even occasional dispute".

Glencore did, however, have subsidiaries in countries that would be "termed tax neutral or tax haven jurisdictions".

Although these subsidiaries served "a commercial or administrative purpose" and had "no tax motivation", a continuing review of its structure had "removed many many tax haven incorporated companies, or established their tax residence in Switzerland, the UK or another non-tax haven jurisdiction".

A closely watched "transfer pricing" case resumes in the Full Federal Court in August when the Australian Taxation Office appeals a Glencore victory late in the Federal Court in October 2019 over taxes paid on the sales of copper concentrate in 2007, 2008 and 2009.

The tax office is reportedly seeking $178 million.