ATO to repay Rio Tinto $42m

Mining giant Rio Tinto has reached an agreement with the Australian Tax Office to settle an outstanding dispute over tax assessments imposed on 1997 franking credit transactions.

Rio Tinto made a part payment as required by taxation law in August 2003 of $164 million, pending resolution of the claim.

By the end of 2006, there was about $515 million in dispute, including additional tax, penalties and interest.

The agreed settlement has been made without any concessions or admissions of liability on either part and involves the Tax Office repaying $42 million from Rio Tinto's part payment.