WASHINGTON (Reuters) – U.S. President Donald Trump’s reelection campaign ended 2017 with $22 million in cash — helped by $6.9 million in contributions in the fourth quarter of the year, his campaign announced on Wednesday.
Vancouver-based Turquoise Hill Resources Ltd. was accused Wednesday by a Dutch non-profit of avoiding hundreds of millions of dollars in Canadian taxes through the use of tax havens.
The report by the Centre for Research on Multinational Corporations, known as SOMO, said Turquoise Hill parent company Rio Tinto used so-called mailbox companies in the Netherlands and Luxembourg to channel financing of the massive Oyu Tolgoi mine, bypassing the higher taxes the company would have paid in Canada.
Had Turquoise Hill directly reaped the profits from its Mongolian operations, rather than have its Luxembourg subsidiary count them, it would have paid US$470 million more over seven years, the report said.
“This use of mailbox companies to gain illegitimate access to tax treaty benefits is considered by the OECD as treaty abuse,” wrote the authors.
Watch: Leaked “Paradise Papers” documents reveal tax havens of the world’s wealthy
Turquoise Hill challenged the report as having significant inaccurate or unsubstantiated facts, without specifying the apparent errors in the report.
“Turquoise Hill believes that our tax practices are not only compliant with local laws, international standards and voluntary commitments, but that Oyu Tolgoi’s operation is making substantial contributions to Mongolia’s economy and long-term development,” the company said in a statement.
Rio Tinto, which owns 51 per cent of Turquoise Hill, challenged the report’s findings and said the governments of Canada and Mongolia had approved the structure.
“The flawed SOMO report contains a number of unsubstantiated and incorrect allegations regarding tax,” Rio Tinto said in a statement.
Earlier on HuffPost Canada:
The company said it is paying its fair share of tax in Mongolia, and is one of the country’s largest taxpayers with upward of US$1.8 billion in taxes and royalties paid between 2010 and 2017.
Mongolia terminated the tax treaties with the Netherlands and Luxembourg in 2013 that allowed Rio Tinto to access lower tax rates, but the company was able to continue to use the lower rates because of clauses in an investment agreement it signed in 2009.
The government tried to renegotiate tax issues, but after Rio Tinto agreed to some concessions, the government left in the lower rate as part of an agreement reached in 2015, depriving it of an estimated US$230 million in taxes, the report said.
The agreements were ratified based on transparent, factual information and on terms comparable with other mining operations globally, Rio Tinto said.
But Mongolia does not appear to be satisfied, starting a new tax dispute last month when it sent a US$155 million tax bill to the owners of Oyu Tolgoi.
CRA sees deal as legal
Canadians should also be dissatisfied with the current arrangement, said MiningWatch Canada outreach co-ordinator Jamie Kneen.
He said the Canada Revenue Agency has challenged Cameco Corp. and Wheaton Precious Metals for their apparent use of tax havens to channel profits through, so it’s not clear why the CRA has apparently approved the Turquoise Hill arrangement.
“Here’s one that CRA has deemed to be legal, and it’s depriving Canada of millions in revenue and its not at all clear why they would do that.”
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