Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Miner BHP to pay $390 million in Australian tax dispute over Singapore hub

Published 19/11/2018, 08:22
© Reuters.  Miner BHP to pay $390 million in Australian tax dispute over Singapore hub
BHP
-
RIO
-
BHPB
-
RIO
-

By Melanie Burton

MELBOURNE (Reuters) - BHP (AX:BHP) on Monday said it had signed an agreement with Australia's tax authorities to settle a long-running dispute over the global miner's operations in Singapore.

As part of the deal, the world's largest miner is paying a total of about A$529 million ($386.43 million) in additional taxes on income for 2003 to 2018, BHP said in a statement, adding that it had already paid A$328 million of that.

The settlement removes a thorn from the side of BHP which alongside fellow miner Rio Tinto (L:RIO) (AX:RIO) was accused of not paying its fair share of tax as governments cracked down on multinationals in the wake of the global financial crisis. Both companies denied the accusations.

Tax authorities had been in dispute with both firms over the amount of Australian tax payable from sales of Australian commodities to their Singapore marketing businesses.

"It's good to resolve, no admission of liability but small in the overall scheme for BHP," said Rohan Walsh, a Melbourne-based investment manager for Karara Capital.

BHP had threatened court action after the Australian government earlier demanded it pay $767 million in back taxes and penalties.

"This is an important agreement and we are pleased to resolve this longstanding matter," BHP CFO Peter Beaven said.

Additionally, BHP will raise its stake in BHP Billiton (LON:BLT) Marketing AG, which is the main company conducting the miner's Singapore marketing business, to 100 percent from 58 percent.

The change in ownership will make all profits made in Singapore from Australian assets owned by BHP fully subject to Australian tax, the miner added.

"This is a landmark and precedential development in the execution of our marketing hubs strategy, and sends a strong signal to other industry participants," the Australian Tax Office (ATO) said in a statement.

"Given the importance of mining and natural resources to the Australian economy, it is critical that exporters of Australian commodities, whether iron ore, coal, gas or other commodities, pay the correct tax in Australia on their profits."

A spokesman for Rio Tinto said that its discussions with the ATO were ongoing and otherwise declined to comment.

"(The deal) fully resolves the longstanding dispute ... with no admission of tax avoidance by BHP, and provides certainty in relation to the future taxation treatment," BHP said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.