BHP to fork out $125m after High Court defeat

The High Court of Australia has ruled that BHP would be taxed in Australia for the income earned in its Singapore marketing hub.

BHP has been forced to pay $125 million in tax as a result of the decision.

This finalises the dispute between BHP and the Australian Taxation Office (ATO) regarding Australia’s taxation of marketing hub profits.

Profits made by from the Australian subsidiaries of BHP UK and BHP Australia made in Singapore’s marketing arm will now be taxed.

“This decision means that BHP Australia was taxable on its share of profits derived by the marketing hub from selling commodities mined in Australia, which it purchased from BHP UK’s Australian subsidiaries,” ATO deputy commissioner Rebecca Saint said.

“The resolution of this case in conjunction with BHP’s earlier structural simplification and $529 (million) transfer pricing settlement means that this long running dispute is now concluded, and Australians can have full confidence that BHP, as one of Australia’s largest companies, is paying full tax on its profits from the sale of Australian commodities.”

According to the ATO, domestic and international tax structures of multinational companies such as BHP have been a target of the Tax Avoidance Taskforce.

Australia’s mining industry pays more tax than all other industry averages, according to a recent KPMG survey.

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