BHP has settled a dispute with the Australian Taxation Office (ATO) regarding taxes that were allegedly owed by the mining major over a 15-year period.
The issues arose from taxes that the ATO alleged BHP owed on the sale of Australian BHP commodities to BHP’s Singapore marketing operations from 2003–2018.
BHP has agreed to pay $529 million in additional taxes to cover income from this period. The company also announced that it had already paid $328 million of this amount.
The company also agreed to increase its ownership in BHP Billiton Marketing AG, the parent of BHP’s Singapore marketing business, from 58 per cent to 100 per cent from July 2019 in order to clarify the operation’s tax status.
BHP was mentioned multiple times — along with fellow major Rio Tinto — in a 2015 Australian Senate inquiry into corporate tax avoidance and “aggressive minimisation” that found the miner effectively paid “no income tax on profits from its Singapore marketing operations” due in part to Singapore’s lower tax jurisdiction. Tech companies Google and Apple were also mentioned in the report.
BHP chief financial officer Peter Beaven said the company was pleased to resolve the longstanding matter.
“The $529 million payable under the settlement is in addition to the more than $75 billion in Australian taxes and royalties that has already been paid by BHP over that same period,” he said in a BHP statement.
“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.”
BHP did not admit liability for tax evasion as part of its settlement with the ATO.
This morning, the company also announced the formal change of the company’s full names from BHP Billiton Ltd and BHP Billiton Plc to BHP Group Limited and BHP Group Plc following shareholder approval.