PERTH (miningweekly.com) – Mining giant BHP Billiton on Thursday defended its 400-people strong marketing hub in Singapore, saying that the office offered valuable market intelligence and that tax treatment had not been the driver behind its decision to set up shop in the South-East Asian country.
BHP Billiton and Rio Tinto are reportedly being investigated by the Australian Taxation Office (ATO) for channelling billions in profits from the sale of Australian iron-ore through their Singapore marketing companies.
Citing documents in its possession, the Australian Financial Review reports that the arrangement saves BHP Billiton and Rio Tinto more than $750-million a year in taxes.
The paper claims that BHP Billiton has paid no tax on $5.7-billion in profits reported at its Singapore marketing company since 2006, while Rio Tinto's Singapore holdings reported $3-billion in profits since 2008.
While a spokesperson for ATO declined to comment on the tax affairs of specific entities, citing confidentiality provisions in the Tax Administration Act, the spokesperson told Mining Weekly Online that the ATO was currently auditing 15 marketing hubs.
BHP Billiton said in a response to questions from Mining Weekly Online that it paid income tax on a “substantial portion” of the revenue earned by the marketing operations, as required under Australian law.
“BHP Billiton employs around 400 people in its marketing team in Singapore. The team’s activities are extensive and have generated significant value for BHP Billiton and the Australian economy. As an important trading hub with proximity to the majority of our customers and relevant markets, our base in Singapore also provides important intelligence on commodity outlook and national and international economic trends that shape our investment decision-making,” the spokesperson added.
During 2014, BHP Billiton paid some $9.6-billion in taxes and royalties worldwide, of which $7.8-billion was paid in Australia. During the same period, Rio Tinto paid $7.1-billion in global taxes, with the company contributing $5.6-billion to Australian coffers.