PERTH (miningweekly.com) – Diversified miner BHP has reached a settlement agreement with the Australian Taxation Office (ATO) on a longstanding dispute related to the company’s marketing operations in Singapore.
As part of the settlement, BHP said on Monday that it would pay A$529-million in additional taxes for the years 2003 to 2018, without admission of tax avoidance.
The miner has already paid A$328-million of this amount.
BHP CFO Peter Beaven told shareholders that the agreement with the ATO was an important one.
“The A$529-million payable under the settlement is in addition to the more than A$75-billion in Australian taxes and royalties that has already been paid by BHP over that same period.
“The settlement provides clarity for BHP and the ATO in relation to how taxes will be assessed and paid on the sale of Australian commodities. That certainty is good for business and for Australia.”
The ATO in 2015 struck BHP with a A$1.04-billion tax bill for the 11-year period, between 2003 and 2013, with the tax authority disputing the amount of taxes payable as a result of the sale of Australian commodities through the Singapore hub. Of this, A$661-million related to primary tax and A$381-million was interest and penalty charges.
In addition, BHP announced that, from July next year, BHP Group Limited would increase its ownership of BHP Billiton Marketing, AG, which is the main company conducting the marketing business in Singapore, from 58% to 100%.
The miner said that the change in ownership would result in all profits made in Singapore in relation to Australian assets owned by BHP being fully subject to Australian tax.
The marketing operation would continue to be located in Singapore and would remain an important part of BHP’s value chain, the company said, as it contributed to BHP’s ability to compete in the global marketplace, and to the value of Australia’s natural resources.