Alcoa of Australia Limited achieves substantial victory in US$1 billion transfer pricing claim

Client(s) Alcoa of Australia Limited

Jones Day represented Alcoa of Australia Limited (“Alcoa”), the Australian subsidiary of Alcoa Corporation, in a major victory against the Australian Taxation Office ("ATO") involving a substantial transfer pricing claim of approximately US$1 billion.

The decision followed a month-long trial regarding whether the ATO could apply transfer pricing rules to sales of alumina made by Alcoa to unrelated parties. The Administrative Review Tribunal of Australia accepted Alcoa’s evidence that every relevant sale made, when considered in its full commercial context, was made for arm’s length consideration.

The decision, which was not appealed, brought an end to an intensive eight-year dispute, and was underpinned by close collaboration between Jones Day and Alcoa throughout that period.