Toyota Motor's Australian unit on Tuesday said that authorities are conducting a review of its tax payments between 1994 and 1999, but dismissed a media report it faces a tax bill of up to $A1 billion.
While noting the company is co-operating with the Australian Tax Office, Toyota Australia spokesman Peter Griffin reportedly said the company has met all its tax obligations and that the review is standard for multinational companies.
The ATO review "is not unusual, this is standard practice," Griffin told Dow Jones Newswires, adding: "In our view, we have been doing everything according to the regulations," and stating there is currently no dispute with the tax authority.
He also reportedly rejected suggestions the Japanese company may cut jobs from its 4,700-strong local work force or scale back its Australian operations because of the tax bill.
"There is no link between a review of the taxation position and our jobs anywhere in Toyota Australia," Griffin told Dow Jones, adding: "These jobs are safe and the business is looking to grow in Australia."
According to Dow Jones, the Herald Sun newspaper in Melbourne said that the ATO is investigating Toyota Australia for shifting profits outside the country to avoid high taxes.
Citing the ATO, the report said the so-called ‘transfer pricing scheme’ has cut Toyota's tax bill by between $A400 million and $A1 billion, Dow Jones added.
"The review is still under way, so I'm not sure where that number came from," Griffin told the news agency.
Dow Jones said transfer pricing is a business practice where goods are sold or services moved between subsidiaries to minimise profits in high-tax countries such as Australia.
"It is allowed by the ATO provided you follow regulations," Griffin reportedly said.
According to Dow Jones, he didn't know when the review would be completed and the tax office declined to comment.
Toyota's Australian operation is a major manufacturer and exporter of the Camry sedan model line. Export markets include the Far East.
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