BHP opposes Singapore hub tax bill
BHP BILLITON is contesting A$522 million (R4.9 billion) in Australian tax bills on its Singapore marketing operations up to 2010, after having paid almost no tax in Singapore since 2006, the global miner told an Australian Senate panel.
The figures were released yesterday by a Senate committee that is investigating corporate tax avoidance. BHP Billiton was forced to send written responses to the panel after refusing to disclose the figures at a hearing on April 10.
The company revealed that between 2006 and 2014 its Singapore marketing business earned profits of $5.7bn (R69bn), on which it paid just $121 000 in tax in Singapore.
“The Singapore government has granted BHP Billiton Marketing a tax incentive for its marketing activities. BHP Billiton Marketing was awarded this incentive for its contributions to the development of Singapore’s commodities sector,” the company said. However, BHP Billiton highlighted that its Singapore marketing hub is 58 percent owned by BHP, which is dual-listed in Australia and Britain, and paid tax on those earnings also in Australia.
“It is important to note that 58 percent of the profit which BHP Billiton Marketing earns in Singapore from the on-sale of commodities acquired from Australian entities controlled by BHP is subject to tax in Australia at the company tax rate of 30 percent,” BHP said.
The company paid A$945m in tax in Australia on its Singapore marketing operation earnings between 2006 and 2014.
The A$522m in tax bills it faces from Australia include contested tax plus interest and penalties owed on transfer pricing, the price at which BHP’s Australian entities sell commodities they mine to the Singapore marketing business.
It also includes tax, interest and penalties the Australian government says is owed from the marketing hub under controlled foreign company rules.
“BHP has objected to these assessments,” the firm said.
The firm said it was also being audited for taxes paid between 2009 and 2013 under the transfer pricing rules and taxes paid between 2011 and 2014 under the controlled foreign company rules, a period when it was achieving record profits.