In the wake of the April 10 Senate Inquiry BHP have been forced to reveal their effective tax rate on profits at their Singapore Trading Hub.
It was shown BHP have paid a tax rate of only 0.002 per cent on profits gained by selling iron ore to the Singapore subsidiary of BHP at less than market rates, ABC reported.
With negotiated tax incentives from the Singapore government, BHP paid $US121,000 in Singapore and $945 million in Australia on profits of $US5.6 billion between 2006 and 2014.
The tax paid in Singapore equates to US$15,000 per year.
“The Singapore government has granted BHP Billiton Marketing AG [Singapore] a tax incentive for its marketing activities. BHP Billiton Marketing AG was awarded this incentive for its contributions to the development of Singapore’s commodities sector,” BHP Billiton said in a statement to the Economic References Committee.
“The tax incentive applies to the vast majority of BHP Billiton Marketing AG’s income in Singapore. Accordingly, BHP Billiton Marketing AG has paid approximately US$121,000 of income tax in Singapore since 2006.”
The rate of tax BHP claimed it paid to Australia from Singapore profits equates to an effective tax rate of 5.6 per cent.
However, BHP issued the following statement: “It is important to note that 58 per cent of the profit which BHP Billiton Marketing AG earns in Singapore from the on-sale of commodities acquired from Australian entities controlled by BHP Billiton Limited is subject to tax in Australia at the company tax rate of 30 per cent,” it said.
The ATO is currently seeking unpaid tax from BHP of $301 million, interest of $145 million, and penalties of $76 million.
The revelations come after BHP representative Tony Cudmore refused to answer questions about a position paper issued by the ATO or their profits and tax through the Singapore Marketing Hub, and was compelled to return those answers on notice.
In the same inquiry Rio Tinto Australia managing director Phil Edmonds told the committee that Rio Tinto is taxed at a rate of five per cent in Singapore.
Edmands said Rio earned US$719 million in Singapore last year, and paid $44 million in tax, an effective tax rate of 6.1 per cent.
Image: The Australian