Tianqi Lithium, IGO face $170M ATO tax standoff
Tianqi Lithium and IGO (ASX:IGO) are locked in a high-stakes standoff with the Australian Taxation Office, facing a potential financial exposure exceeding $170 million plus hefty penalties.
Filings submitted to the Australian Securities and Investments Commission reveal the true scale of the long-running dispute, which zeroes in on the 2020 inception of the joint venture, Tianqi Lithium Energy Australia.
The ATO is scrutinising corporate structures that may have enabled a tax-free exit from certain Australian investments.
Tianqi’s documents indicate that if the ATO applies Part IVA anti-avoidance provisions, the companies could face penalities ranging from 25% to 100% of the total tax liability, leaving South Perth-based IGO on the hook for up to $96.7 million.
Despite the looming threat, Tianqi remains confident, assessing the likelihood of an actual financial outflow at under 50%.
No provisions have been accrued in their accounts, and a company spokesperson confirmed that operations at their Kwinana lithium hydroxide refinery remain unaffected.
Compounding their tax woes, TLEA’s subsidiary, Windfield Holdings—which operates the highly profitable Greenbushes mine—is concurrently undergoing an ATO transfer-pricing audit covering the 2020 to 2024 income years.
Beyond the taxman's glare, internal friction is mounting. IGO has written down its 49% stake in the loss-making, $1.2 billion Kwinana refinery to zero and is pushing to mothball the facility.
However, majority owner Tianqi has blocked the move, viewing the refinery as an indispensable pillar of its global strategy.
