[{"data":1,"prerenderedAt":456},["ShallowReactive",2],{"active-categories":3,"blowouts":28,"story-\u002Fstories\u002Fprofit-shifting-money-trail-chevron-rio-tinto":83,"related-\u002Fstories\u002Fprofit-shifting-money-trail-chevron-rio-tinto":430,"surround-\u002Fstories\u002Fprofit-shifting-money-trail-chevron-rio-tinto":447},[4,6,8,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27],{"category":5},"follow-the-money",{"category":7},"cost-of-living",{"category":9},"government-waste",{"category":9},{"category":9},{"category":7},{"category":7},{"category":9},{"category":9},{"category":5},{"category":9},{"category":9},{"category":7},{"category":9},{"category":9},{"category":9},{"category":7},{"category":5},{"category":7},{"category":9},{"category":9},[29,39,49,58,66,75],{"path":30,"title":31,"category":9,"date":32,"blowout":33},"\u002Fstories\u002Fbom-website-96-million-one-year-on","One year on: the BOM website that cost $96.5 million, not $4 million","2026-10-24",{"project":34,"originalCost":35,"currentCost":36,"announced":37,"note":38},"BOM website",4100000,96500000,"2025","$4.1m was the figure first given to the public.",{"path":40,"title":41,"category":9,"date":42,"blowout":43},"\u002Fstories\u002Fcross-river-rail-cost-blowout-19-billion","Cross River Rail was sold as a $5.4 billion project. The government now says it costs $19 billion","2026-10-25",{"project":44,"originalCost":45,"currentCost":46,"announced":47,"note":48},"Cross River Rail",5400000000,19041000000,"2017","Queensland Government figure (Oct 2025). It includes 25 years of tunnel maintenance and network works; Labor disputes counting them.",{"path":50,"title":51,"category":9,"date":42,"blowout":52},"\u002Fstories\u002Fhunter-class-frigates-27-billion-three-ships","Hunter-class frigates: sold as nine warships for $35 billion. We're now paying $27 billion for three",{"project":53,"originalCost":54,"currentCost":55,"announced":56,"note":57},"Hunter-class frigates",35000000000,45600000000,"2018","2020 Force Structure Plan estimate for nine ships. The program is now six ships; close to $27bn is allocated for the first three, including the Osborne shipyard.",{"path":59,"title":60,"category":9,"date":42,"blowout":61},"\u002Fstories\u002Finland-rail-cost-blowout-45-billion-parkes","Inland Rail was sold as a $10.7 billion project. It now costs $45.6 billion, and stops at Parkes",{"project":62,"originalCost":63,"currentCost":55,"announced":64,"note":65},"Inland Rail",10660000000,"2015","Both P90 estimates for the full Melbourne to Brisbane line. Only Beveridge to Parkes is now being built.",{"path":67,"title":68,"category":9,"date":42,"blowout":69},"\u002Fstories\u002Fnorth-east-link-cost-blowout-26-billion","North East Link was sold as a $10 billion road. It now costs $26 billion",{"project":70,"originalCost":71,"currentCost":72,"announced":73,"note":74},"North East Link",10000000000,26100000000,"2016","Victoria's December 2023 estimate. Includes the Eastern Freeway and M80 upgrades added since.",{"path":76,"title":77,"category":9,"date":42,"blowout":78},"\u002Fstories\u002Fsnowy-2-0-cost-blowout-25-billion","Snowy 2.0 was sold as a $2 billion project. It could now cost $25 billion",{"project":79,"originalCost":80,"currentCost":81,"announced":47,"note":82},"Snowy 2.0",2000000000,22200000000,"Target cost. Up to $25bn with contingency; transmission not included.",{"id":84,"title":85,"author":86,"bigNumber":87,"bigNumberLabel":88,"blowout":89,"body":90,"category":5,"date":42,"description":387,"draft":388,"extension":389,"featured":388,"focusKeywords":390,"image":391,"imageAlt":392,"meta":393,"navigation":394,"path":395,"people":396,"readingTime":397,"refresh":89,"seo":398,"shareImage":89,"sources":399,"stem":421,"tags":422,"updated":89,"__hash__":429},"stories\u002Fstories\u002Fprofit-shifting-money-trail-chevron-rio-tinto.md","How to move a profit offshore: the 9% loan and the Singapore hub","Aussie Outrage","~$1bn","What Rio Tinto agreed to pay the ATO to settle its Singapore marketing hub dispute",null,{"type":91,"value":92,"toc":378},"minimark",[93,97,102,105,189,194,203,210,214,217,283,294,297,301,304,332,335,339,346,349,361],[94,95,96],"p",{},"When a multinational pays little tax in Australia, the money usually hasn't disappeared. It has moved, legally or not, to a related company in another country. Here are two cases where the trail ended up in front of a judge or the tax office.",[98,99,101],"h2",{"id":100},"trail-one-the-9-loan","Trail one: the 9% loan",[94,103,104],{},"In 2003, Chevron's Australian arm, which develops the giant Gorgon and Wheatstone gas projects in Western Australia, needed money.",[106,107,108,121],"table",{},[109,110,111],"thead",{},[112,113,114,118],"tr",{},[115,116,117],"th",{},"Step",[115,119,120],{},"What happened",[122,123,124,137,153,161,169,177],"tbody",{},[112,125,126,130],{},[127,128,129],"td",{},"1",[127,131,132,133],{},"Chevron Australia set up its own subsidiary in the United States, which raised money in the US commercial paper market at about ",[134,135,136],"strong",{},"1.2%",[112,138,139,142],{},[127,140,141],{},"2",[127,143,144,145,148,149,152],{},"Under a credit agreement signed on 6 June 2003, the subsidiary lent Chevron Australia the Australian-dollar equivalent of up to ",[134,146,147],{},"US$2.5 billion",", at about ",[134,150,151],{},"9%"," a year",[112,154,155,158],{},[127,156,157],{},"3",[127,159,160],{},"Chevron Australia paid the interest to its US subsidiary and claimed it as a deduction in Australia, reducing its Australian taxable profit",[112,162,163,166],{},[127,164,165],{},"4",[127,167,168],{},"The ATO said the interest rate was far higher than unrelated parties would have agreed, and issued amended assessments",[112,170,171,174],{},[127,172,173],{},"5",[127,175,176],{},"The Federal Court sided with the ATO in 2015. In 2017 the Full Federal Court unanimously dismissed Chevron's appeal",[112,178,179,182],{},[127,180,181],{},"6",[127,183,184,185,188],{},"In August 2017 Chevron dropped its bid to go to the High Court and settled with the ATO, reportedly for about ",[134,186,187],{},"A$340 million"," including tax, penalties and interest",[190,191],"big-stat",{"label":192,"source":193,"value":151},"Interest Chevron Australia paid its own US subsidiary on a loan of up to US$2.5bn: terms the courts found were not arm's length","Chevron v Commissioner of Taxation [2017] FCAFC 62",[195,196],"bar-chart",{":data":197,"note":198,"source":199,"subtitle":200,"suffix":201,"title":202},"[{\"label\":\"What Chevron's US subsidiary paid to borrow it\",\"value\":1.2},{\"label\":\"What it charged Chevron Australia\",\"value\":9,\"highlight\":true,\"note\":\"The interest was deducted from Chevron Australia's taxable profit\"}]","The two rates are in different currencies: the US subsidiary borrowed in US dollars and lent in Australian dollars, when Australian interest rates were higher. Part of the gap reflects that; the court found the 9% was still more than an arm's length rate.","Chevron Australia Holdings v Commissioner of Taxation [2017] FCAFC 62","Approximate annual interest rates, 2003","%","Borrow cheap, lend dear: the same money, two interest rates",[94,204,205,206,209],{},"The key test is called ",[134,207,208],{},"arm's length",": would two unrelated companies have agreed to this price? The Full Federal Court found the 9% did not reflect an arm's length price: a borrower in Chevron Australia's position, backed by its parent's credit strength, could have borrowed more cheaply. The case is now widely cited as the leading Australian ruling on loans between related companies.",[98,211,213],{"id":212},"trail-two-the-singapore-hub","Trail two: the Singapore hub",[94,215,216],{},"Rio Tinto digs iron ore in Western Australia and sells it mostly to Asian steelmakers. For years the sales went through a Rio Tinto marketing company in Singapore.",[106,218,219,227],{},[109,220,221],{},[112,222,223,225],{},[115,224,117],{},[115,226,120],{},[122,228,229,236,243,250,257,276],{},[112,230,231,233],{},[127,232,129],{},[127,234,235],{},"Rio's Australian mining companies sold ore to the related Singapore marketing hub",[112,237,238,240],{},[127,239,141],{},[127,241,242],{},"The Singapore hub sold it on to customers and was paid a margin for its work",[112,244,245,247],{},[127,246,157],{},[127,248,249],{},"Profit booked in Singapore is taxed at a lower rate: Singapore's headline company tax rate is 17%, against Australia's 30%",[112,251,252,254],{},[127,253,165],{},[127,255,256],{},"The ATO disputed how much profit should sit in Singapore rather than Australia, for years from 2010",[112,258,259,261],{},[127,260,173],{},[127,262,263,264,267,268,271,272,275],{},"In July 2022, Rio agreed to pay ",[134,265,266],{},"A$613 million"," in extra tax for 2010 to 2021 (including $55 million in interest and $22 million in penalties), on top of ",[134,269,270],{},"A$378 million"," it had already paid on amended assessments: close to ",[134,273,274],{},"$1 billion"," in all",[112,277,278,280],{},[127,279,181],{},[127,281,282],{},"The deal ended all of Rio's tax disputes with the ATO, and set how profit on sales through Singapore (iron ore, aluminium and other products) is split with Australia up to 2026",[284,285],"split-bar",{":data":286,":decimals":287,"note":288,"prefix":289,"source":290,"subtitle":291,"suffix":292,"title":293},"[{\"label\":\"Additional tax agreed in 2022\",\"value\":613,\"highlight\":true},{\"label\":\"Already paid on amended assessments\",\"value\":378}]","0","The additional $613m includes $55m in interest and $22m in penalties.","$","Rio Tinto statement, 20 July 2022","Tax paid to the ATO over the Singapore hub dispute, 2010 to 2021, millions of dollars","m","How Rio Tinto's ~$1 billion settlement adds up",[94,295,296],{},"A settlement like this resolves a dispute about how profit should be split between countries; it isn't a court finding against the company. The ATO had been seeking about $1.2 billion.",[98,298,300],{"id":299},"the-tricks-the-ato-is-watching-now","The tricks the ATO is watching now",[94,302,303],{},"The same patterns turn up again and again. In October 2026 the ATO said it was focused on:",[305,306,307,314,320,326],"ul",{},[308,309,310,313],"li",{},[134,311,312],{},"Related-party loans"," (the Chevron pattern)",[308,315,316,319],{},[134,317,318],{},"Offshore marketing hubs"," (the Rio pattern)",[308,321,322,325],{},[134,323,324],{},"Royalties"," paid to an overseas sister company for brands, software or patents",[308,327,328,331],{},[134,329,330],{},"Data centres, cloud and AI firms"," making big payments to related companies offshore",[94,333,334],{},"None of these is illegal in itself. What matters is the price. When a company sets the price of a loan, a sale or a royalty with its own sister company, there's nobody on the other side of the table pushing back. That's the job the ATO is left to do, one audit at a time.",[98,336,338],{"id":337},"why-it-matters","Why it matters",[94,340,341,342,345],{},"The ATO's Tax Avoidance Taskforce, set up in 2016, has collected ",[134,343,344],{},"$36 billion"," in extra tax. That money was only collected because someone checked.",[94,347,348],{},"Australians who earn a wage can't book their income in Singapore. Their tax comes out of every pay packet before they see it.",[94,350,351],{},[352,353,354,355,360],"em",{},"This story is part of Follow the Money. See also: ",[356,357,359],"a",{"href":358},"\u002Fstories\u002Fato-tax-transparency-2024-25-companies-paid-no-tax","1,149 of Australia's biggest companies paid no income tax last year",".",[94,362,363],{},[352,364,365,366,372,373,360],{},"Top photo: Singapore's financial district across Marina Bay, August 2023. Photo: Daniel Case, ",[356,367,371],{"href":368,"rel":369},"https:\u002F\u002Fcreativecommons.org\u002Flicenses\u002Fby-sa\u002F4.0",[370],"nofollow","CC BY-SA 4.0",", via ",[356,374,377],{"href":375,"rel":376},"https:\u002F\u002Fcommons.wikimedia.org\u002Fwiki\u002FFile:Singapore_Financial_District_skyline_from_across_Marina_Bay.jpg",[370],"Wikimedia Commons",{"title":379,"searchDepth":380,"depth":381,"links":382},"",2,3,[383,384,385,386],{"id":100,"depth":380,"text":101},{"id":212,"depth":380,"text":213},{"id":299,"depth":380,"text":300},{"id":337,"depth":380,"text":338},"Two real cases, one decided in court and one settled with the tax office for about $1 billion, show how multinationals can shrink an Australian tax bill. Follow the money, step by step.",false,"md",[],"\u002Fimages\u002Fsingapore-financial-district.jpg","The towers of Singapore's financial district seen across Marina Bay",{},true,"\u002Fstories\u002Fprofit-shifting-money-trail-chevron-rio-tinto",[],5,{"title":85,"description":387},[400,403,406,409,412,415,418],{"title":401,"url":402},"Chevron Australia Holdings Pty Ltd v Commissioner of Taxation [2017] FCAFC 62 (Full Federal Court)","https:\u002F\u002Fwww.judgments.fedcourt.gov.au\u002Fjudgments\u002FJudgments\u002Ffca\u002Ffull\u002F2017\u002F2017fcafc0062",{"title":404,"url":405},"Chevron Australia Holdings Pty Ltd v Commissioner of Taxation (No 4) [2015] FCA 1092","https:\u002F\u002Fwww.judgments.fedcourt.gov.au\u002Fjudgments\u002FJudgments\u002Ffca\u002Fsingle\u002F2015\u002F2015fca1092",{"title":407,"url":408},"Deloitte: Court cases shaping transfer pricing (Chevron facts, settlement)","https:\u002F\u002Fwww.deloitte.com\u002Flu\u002Fen\u002Fservices\u002Ftax\u002Fperspectives\u002Fcourt-cases-shaping-transfer-pricing.html",{"title":410,"url":411},"Rio Tinto: Rio Tinto settles all tax disputes with Australian Tax Office (statement, 20 Jul 2022, SEC filing)","https:\u002F\u002Fwww.sec.gov\u002FArchives\u002Fedgar\u002Fdata\u002F863064\u002F000162828022019969\u002Fex07d20mratotaxsettle_.htm",{"title":413,"url":414},"The New Daily: Rio Tinto ends decade-long dispute by settling $1 billion tax bill with ATO (20 Jul 2022)","https:\u002F\u002Fthenewdaily.com.au\u002Ffinance\u002F2022\u002F07\u002F20\u002Frio-tinto-ends-decade-long-dispute-by-settling-1-billion-tax-bill-with-ato\u002F",{"title":416,"url":417},"Investor Daily: Rio Tinto settles ATO dispute for almost $1bn","https:\u002F\u002Fwww.investordaily.com.au\u002Frio-tinto-settles-ato-dispute-for-almost-1bn",{"title":419,"url":420},"ABC News: ATO says 1,149 large companies paid no tax as it scrutinises AI firms (1 Oct 2026)","https:\u002F\u002Fwww.abc.net.au\u002Fnews\u002F2026-10-01\u002Fato-reveals-companies-that-paid-no-tax-as-fights-profit-shifting\u002F107204032","stories\u002Fprofit-shifting-money-trail-chevron-rio-tinto",[423,424,425,426,427,428],"corporate-tax","multinationals","profit-shifting","chevron","rio-tinto","explainer","Lnigp9zLUyEUisNq3wHGHY9ScyVR_0KG8_bJe7RTGKM",[431,438],{"path":358,"title":359,"description":432,"date":42,"category":5,"author":86,"image":433,"imageAlt":434,"bigNumber":435,"bigNumberLabel":436,"readingTime":437,"featured":388},"The ATO's latest tax transparency report covers every company earning more than $100 million. More than one in four paid nothing. Here's what the numbers show, and why the tax office says it's not always a scandal.","\u002Fimages\u002Fato-building-canberra.jpg","A multi-storey Australian Taxation Office building in Canberra's city centre, with a car park in front","1 in 4","Large companies that paid no income tax in 2024-25",7,{"path":439,"title":440,"description":441,"date":42,"category":5,"author":86,"image":442,"imageAlt":443,"bigNumber":444,"bigNumberLabel":445,"readingTime":446,"featured":388},"\u002Fstories\u002Feast-coast-gas-exported-australians-pay-more","Three-quarters of east coast gas is shipped overseas. Australians pay export prices for the rest","Before the Gladstone LNG plants opened, east coast gas cost about $4 a gigajoule. Now it's around $14, and the regulator is warning of shortfalls. Follow the gas, and the money.","\u002Fimages\u002Fgas-curtis-island-lng.jpg","An aerial view of LNG plants being built on Curtis Island, with storage tanks on the shoreline near Gladstone","75%","Share of east coast gas production that is exported as LNG",6,[448,453],{"title":449,"path":450,"stem":451,"description":452,"children":-1},"Power prices 'fell' this year. So why is your bill bigger?","\u002Fstories\u002Fpower-bills-rebates-ended-prices-falling","stories\u002Fpower-bills-rebates-ended-prices-falling","The regulator cut its benchmark price by a few per cent in July. But the government rebates have ended, and the rises of 2022 to 2024 haven't gone anywhere. Here's what's really happening to your power and heating bills.",{"title":77,"path":76,"stem":454,"description":455,"children":-1},"stories\u002Fsnowy-2-0-cost-blowout-25-billion","Snowy 2.0 was sold at $2 billion in 2017. Snowy Hydro's new target cost is $22.2 billion, up to $25 billion, and first power is now 2029. How it blew out.",1793586230219]