|Turquoise Hill Resources - TRQ.t is advancing the flagship Oyu Tolgoi Project, one of the world's largest copper-gold-silver mines. |
The Oyu Tolgoi Project represents an investment of over $ 8 billion
The Globe and Mail reports in its Thursday edition that Turquoise Hill Resources is being accused of avoiding hundreds of millions of dollars in Canadian taxes through the use of tax havens. A Canadian Press dispatch to The Globe says that a report by the Dutch-based Centre for Research on Multinational Corporations, known as SOMO, alleges that Turquoise Hill parent company Rio Tinto Group 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, it would have paid $578.7-million more over seven years, the report said. "This use of mailbox companies ... is considered by the OECD as treaty abuse," the report said. Turquoise Hill challenged the report as having significant inaccurate or unsubstantiated facts, without specifying the apparent errors in the report. 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. Mongolia, however, last month sent a $155-million (U.S.) tax bill to the owners of Oyu Tolgoi.