Sunday , April 18 2021

BHP resolves tax dispute with Australian government



BHP has settled a lengthy tax dispute with the Australian government over sales of raw materials channeled through an offshore marketing center.

The world's largest miner, listed in Sydney and London, said it agreed to pay $ 529 million in additional taxes for the years 2003 to 2018. There was no admission of tax evasion by BHP.

"This is an important agreement and we are pleased to solve this longstanding problem," said Peter Bevan, chief financial officer of BHP.

"The agreement provides clarity for BHP and the Australian Taxation Office regarding how taxes will be assessed and paid for by selling Australian commodities."

For years, BHP has sold commodities and produces in Australia, as iron ore for steel production, for a marketing arm of Singapore. This unit, which benefits from a trade agreement between the UK and the city-state, sells the raw material to customers around the world.

Also known as transfer pricing, this setup upset the Australian Taxation Office (ATO), which sought out BHP to get extra taxes. Rio Tinto also has a marketing arm based in Singapore.

The ATO issued BHP with claims of A $ 661 million in back taxes or A $ 1 billion, including interest and penalties for the years 2003 through 2013, according to the company.

BHP said its marketing operations will continue to be based in Singapore, but from July its listed entity in Australia would increase its stake in the marketing center by 100%, from 58%.

"The change in ownership will result in all profits made in Singapore from Australian assets owned by BHP Group Limited, fully subject to Australian taxation," the company said.

The Singapore marketing center was also highlighted by Elliott Advisors, the activist investors, in several reports published at BHP.

Elliott has campaigned for BHP to collapse its complex dual list structure, which involves companies listed separately in the UK and Australia.


Source link