Fortescue Metals Group has set up an international marketing company in Singapore, but insists it is not trying to avoid paying tax.
After lambasting its bigger rivals Rio Tinto and BHP Billiton for using marketing hubs as tax shelters in Singapore, Fortescue has defended the establishment of an investment company in the city state.
Fortescue confirmed it has established an investment company in Singapore for shipping and sales-related activities, but chief financial officer Stephen Pearce said it had undertaken "no other activity".
"Fortescue confirms that it pays the applicable tax rates in the countries that it operates and that all income earned by those subsidiaries is then attributed back to Australia and applicable tax paid," Mr Pearce said in a statement.
The world's fourth biggest iron ore miner on Wednesday insisted the Singapore-based company was set up to invest in the China Beijing International Mining Exchange.
"Fortescue is proud of its record of not transferring profits overseas and paying its full share of tax and royalties to Australia."
Mr Pearce also accused BHP and Rio of backgrounding media outlets and falsely trying to insinuate that Fortescue International Marketing was trying to avoid paying tax.
In its submission to the Senate Economics References Committee inquiry into Corporate Tax Avoidance and Minimisation in January, Fortescue said it paid 30 per cent tax in the 2014 financial year and backed efforts to improve global taxation liability transparency.
"Fortescue does not engage in aggressive strategies to minimise its tax exposure in Australia and does not use tax havens to reduce its Australian or global tax liabilities," chief executive Nev Power said in Fortescue's submission.
Fortescue has eight foreign subsidiaries, including three in Singapore and one subsidiary each in Hong Kong, Guernsey, Mozambique, New Zealand and the United States.
Still, the pure play iron ore miner says the amount of capital invested in foreign subsidiaries is less than one per cent of Fortescue's share capital.
The Australian Financial Review reported that Fortescue set up the Singapore company in January 2014 so it could buy and sell iron ore at some time in the future.
Fortescue chairman Andrew Forrest recently said BHP and Rio were manipulating the market to drive out smaller players, but his call for a parliamentary inquiry into the industry was rejected by the federal government.
Fortescue's shares closed four cents, or 1.7 per cent, lower at $2.36.
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