MINING companies Rio Tinto and BHP Billiton have built up a combined arsenal of $1.7 billion in tax credits that can be offset against future mining tax liabilities.
And billionaire miner Andrew Forrest confirmed to Fairfax Media that his iron ore company, Fortescue Metals, would not be paying any tax under the Gillard government's minerals resource rent tax this year.
Mr Forrest, who challenged Treasurer Wayne Swan's claim that the tax would still raise billions in revenue for the government after being watered down during negotiations with Rio, BHP and Xstrata, appears to have been vindicated after Mr Swan's admission that the tax will net a paltry $126 million this year.
''The record stands for itself,'' Mr Forrest said.
While the focus has been on the dramatic shortfall in mining tax collections compared to original Treasury projections of more than $10 billion over four years, the most recent financial accounts of Rio Tinto and BHP Billiton show the two miners have built up $1.1 billion and $637 million in tax credits respectively.
The credits did not reduce the amount of company income tax they had to pay, but can be carried forward to offset future mining tax liabilities.
Tax specialists say the credits have been built up through the mining tax's ''starting base allowance'', which has been criticised by some as being too generous for miners.
These offset amounts will be whittled down over time as the companies apply these amounts against MRRT liabilities. How long these credits will last depends on commodity price movements and profits in years to come.
Mining giant Rio Tinto is expected to post a full-year net profit of more than $9 billion on Thursday, driven by the company's iron ore business. But
the result will be affected by the $US14 billion of write-downs of its aluminium and coal assets it announced before replacing its chief executive Tom Albanese last month.
Mr Forrest's recent MRRT brawl with the government has seen him subjected to criticism from Mr Swan - part of which was his inclusion in the ''badly behaving billionaires'' club that included Clive Palmer and Gina Rinehart. Sources have said that Mr Swan included Mr Forrest as a member of the billionaires in an essay in The Monthly - against the urging of his advisers.
Mr Forrest has said he held meetings with Mr Swan arguing against the MRRT when it was proposed but was told: ''If you don't like the tax you [WA] can secede''.
Mr Forrest's record shows he also met the crossbenchers.
While Mr Swan has admitted that tax receipts from the tax in the current year are minimal there is no up-dated guidance on whether this will improve next year or when it might begin to attract revenue.
Mr Swan says the poor result is due to the softening in iron ore and coal commodity prices but many now agree with Mr Forrest's views that the structure of the tax has been its crucial downfall.
Ultimately the super profits from mining companies will be subjected to tax, but for the first couple of years at least these will be shielded by inserting an ability to include deductions on the revalued assets in their iron ore and coal portfolios.
The major mining companies are loath to talk about the tax that they negotiated with Prime Minister Julia Gillard and Mr Swan. They have kept their heads below the parapet this week as Mr Swan has been in the firing line. The government has responded to the attack by suggesting various changes to the tax but the prospect of a big overhaul before the election is unlikely.
The campaign by BHP, Rio and Xstrata that watered down the super profits tax and replaced it with the more benign MRRT was so potent that Ms Gillard will not take them on again over the next seven months.
Over the next few weeks BHP Billiton and Rio Tinto will release their full-year earnings but there is no guarantee the results will shed much light on how they calculate the future MRRT liability.