Tax Transparency

Tax Governance 

Our Board is ultimately responsible for ensuring a robust system of internal controls is in place for tax governance purposes. Our Global Taxation Policy and comprehensive Global Tax Corporate Governance Framework are key to governing the management of tax-related risks in Australia and in all relevant overseas jurisdictions. The Board, through the AFRMC, receives regular updates from senior management on the operation and effectiveness of our Global Tax Corporate Governance Framework.

Further details on this Framework are contained in the Global Taxation Policy available in our Document Library.

Our Attitude to Tax Risk 

Fortescue adopts a low-risk approach with respect to major transactions and tax compliance activities, undertaking to file only verified tax positions. Major transactions are characterised by the value of the transaction and associated tax risk, technical complexity of the transaction and interpretation of the prevailing tax legislation. Where the application of the tax legislation to a material transaction is unclear or if the assessed tax risk is high, we take further steps, which may include seeking external tax advice or consulting with the relevant taxation authority, to achieve an appropriate level of certainty. There are also a number of controls, systems and procedures in place to manage our exposure to tax risk. 

Tax Transparency Code 

We are committed to transparency across all aspects of our business, including our tax obligations. By publishing relevant tax information we inform our investors and other external stakeholders as well as the wider community. 

Our continuous review of internal tax policies, industry best practice, feedback from key stakeholders and legislative developments further underpins our commitment to tax transparency. 

Fortescue has been a signatory to the Australian Board of Taxation's voluntary Tax Transparency Code (TTC) since 2017. The TTC sets out several principles and minimum standards to guide additional disclosures of tax information by multinational businesses. The TTC is divided into two parts, with the Board of Taxation recommending that both Part A and Part B be adopted by large businesses such as Fortescue. 

To comply with Part A of the TTC, we have extended the scope of our income tax disclosures contained in our annual financial reports since FY17. Part B disclosures are included in our sustainability reporting. This details our approach to tax strategy and governance, as well as providing additional information on overseas operations and international related party transactions. 

Total Tax Contributions 

We apply the prevailing laws in each jurisdiction to work out how much tax we pay. These taxes include: 

• company taxes 

• mining royalties, such as those imposed by state governments 

• employment taxes, such as fringe benefits tax and payroll taxes. 

We also collect and pay a number of additional taxes beyond those which are directly attributable to our business activities. These include pay as you go (PAYG) withholding from salary and wages paid to employees. 

As our primary revenue-generating operations are in Australia, most of our tax liabilities arise and are paid in Australia.

Additionally, some of our international subsidiaries are subject to Australia's Controlled Foreign Company rules. Under these rules, certain profits generated by relevant overseas entities are taxable in Australia at the 30 per cent Australian corporate tax rate (with a credit available for any taxes payable in the entity's country of tax residence). We are also subject to the Base Erosion and Profit Shifting Pillar Two regime, which seeks to apply a global minimum level of taxation on our operations worldwide (refer below for further details).

The total taxes we pay are closely correlated to the earnings before interest, tax, depreciation and amortisation (EBITDA) margin we achieve. Our taxation payments vary in proportion to earnings, which are themselves driven primarily by the iron ore price and the cost of production.

Australian Tax Return Information

Fortescue's Australian income tax return is usually due for lodgement in the January following the end of each financial year.  

For the year ended 30 June 2025, the tax return is expected to be due by 30 January 2026. 

Each year, the Australian Taxation Office (ATO) issues a Report of Entity Tax Information, which provides high-level details of corporate income taxpayers' most recently lodged income tax returns. 

The following table shows this information for the Fortescue Australian tax consolidated group based on the 2022 to 2024 lodged income tax returns. The 2024 income tax return information shown below will be published by the ATO, together with that of other corporate taxpayers, late in the 2025 calendar year. 

It is noted that income tax is payable on taxable income, not gross income or revenue. Taxable income is calculated by subtracting allowable tax deductions from gross income. Taxable income may also differ from accounting profit due to differences between accounting and tax rules concerning income and deductions/expenses.

¹Effective tax rate is calculated by dividing the final income tax payable in Australia by accounting profit before tax.Includes credits for foreign taxes paid on offshore income which is also taxed in Australia at 30 per cent (double taxation relief), and the R&D tax incentive.
²Effective tax rate is calculated by dividing the final income tax payable in Australia by accounting profit before tax.

We first calculate Fortescue's taxable income using its tax functional currency of US dollars, and then convert this to Australian dollars at the ATO’s average exchange rate for the relevant year.

The amounts shown in the table above are different from the tax numbers disclosed in our annual reports for the relevant years for the following reasons: 

• The above amounts only reflect the tax payable by the Australian tax consolidated group, which does not include foreign subsidiaries or Australian entities that are not wholly owned. By contrast, the tax disclosures in the annual report include the tax balances for the global Fortescue Group of entities. 

   

• The above amounts only reflect current tax payable, whereas the tax expense balances in the annual report include the impact of deferred tax expense arising on temporary differences. Temporary differences exist where amounts are assessable or deductible for tax at a different time to when they are recognised under accounting principles. 

   

• Income tax expense in the annual report is based on current year provisional calculations. True-up adjustments resulting from changes between the provisional calculations and those adopted in the final lodged tax returns are reflected in tax expense in a subsequent year. 

Our Relationship with the ATO

As a top 100 Australian taxpayer, we are part of the ATO’s Justified Trust program that seeks to provide assurance that large companies are paying the right amount of tax. FY18 was our first year under the Justified Trust program and, at the outcome of its review, the ATO concluded that it had a high level of assurance that Fortescue paid the right amount of income tax.
This high level of assurance is the highest possible assurance rating under the program and was maintained for the subsequent years from FY19 through to FY23 (the most recently-completed review year), each of which have been subject to discrete review. 

In 2019, the Justified Trust program was expanded to include Goods and Services Tax (GST) for Top 100 taxpayers. The purpose of this program is to test whether Fortescue reported and paid the right amount of GST in its Business Activity Statements. For the years FY20 through to FY24 (the most recently-completed review year), the ATO obtained a high level of assurance that Fortescue had paid the right amount of GST, which is again the highest possible rating that can be achieved under the program. 

We continue to engage transparently and cooperatively with the ATO in respect of all tax matters, including the ATO's ongoing, real-time income tax and GST reviews of each completed tax year, as well as meeting regularly with the ATO throughout the year to provide an update on business performance and significant transactions. 

International Related Party Transactions

The ongoing evolution of our global business has led to an increase in cross-border related party transactions. 

Consistent with our global tax strategy, we conduct all international related party dealings in accordance with arm’s length principles, using methodologies prescribed by the Australian transfer pricing laws and the Organisation for Economic Cooperation and Development (OECD) guidelines. We have a Global Transfer Pricing Policy that applies to our international related party transactions, in order to identify, and to comply with, our global transfer pricing obligations. 

We disclose all material international related party transactions through the lodgement of tax returns and other statutory disclosures to revenue authorities, including our detailed International Dealings Schedules and Country-by-Country reports. FY23 Country-by-Country Report is available in our Document Library.