Ampol, Australia Settle a Long-Running Tax Dispute for $109 Million

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Ampol and the Australian Tax Office (ATO) announced on February 20 that their tax dispute regarding the firm’s centers in Singapore and Australia from 2014 to 2022 had been resolved.

According to the Australian Tax Office, the settlement for AUS $157 million ($109 million) addresses “transfer pricing outcomes of refined products and crude oil between Ampol Singapore and Ampol Australia as well as how Australia’s controlled foreign companies regime will apply to the profits of Ampol Singapore.”

“We are keen to ensure that procurement hubs are not used as a mechanism to shift profit from Australia by charging excessive prices for imported goods and services to reduce the tax paid in Australia,” ATO added.

Ampol will also pay $0.1 million in interest on top of an additional $5.6 million in Australian tax on earnings between 2014 and 2021. This is in addition to the $104.1 million in tax that Ampol Singapore has paid on its earnings in connection with these things upon filing tax returns for the relevant years;

Per customary tax payment schedules, Ampol will pay $48.2 million in Australian tax on Ampol Singapore earnings from the 2022 fiscal year in June 2023;

The settlement deals with how the CFC regime in Australia may affect Ampol Singapore’s earnings and the transfer pricing results of transactions between Ampol Singapore and Ampol Australia.

The tax authorities have reportedly placed a significant emphasis on offshore procurement centres, according to a statement made by the ATO.

These methods entail, in general, the use of an offshore business of the multinational group (the procurement hub) to purchase commodities from outside suppliers and resell those goods to the firm’s local distributors. 

Resolving this dispute is a significant milestone in ensuring compliance, fairness, and transparency in taxation and corporate governance.

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