Mining giant BHP Billiton have copped a massive $1 billion tax bill from the Australian Taxation Office over a “valuation issue” with its marketing office in Singapore.
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It has now sought another $537 million for the period FY09 to FY13, the company has revealed.
The ATO has hit BHP with a $1.016 billion tax for the 2003 to 2013 fiscal years.
“Consequently, we have objected to all of the amended assessments and intend to continue to defend our position, including by initiating court action if necessary”, the miner said.
The ATO is getting $679 million in extra funding over four years for a taskforce to ensure multinationals, private companies and wealthy individuals pay the right amount of tax.
The portion of taxes and royalties paid in Australia collapsed to just $2.52 billion in fiscal 2016, well down from the $6.3 billion paid the year before – which was itself a five year low as commodity prices fell, hitting profits. Chief Financial Officer Peter Beaven said on Wednesday that the company pays its fair share of tax.
BHP is under investigation by the Australian Tax Office (ATO) for allegedly shifting billions of dollars in iron ore profits through marketing hubs in Singapore, where it operates under an effective tax rate of zero as part of a concessional tax deal.
The tax agency has recently warned companies using tax havens to avoid paying in Australia.
“Asia accounts for 72 per cent of our revenue, so our marketing business for minerals is headquartered in Singapore”, he told reporters. This was down from $7.3 billion in fiscal 2015 and reflected a downward slide in prices of iron ore, copper and other commodities a year ago.
“Our payments of taxes and royalties have decreased in FY2016 compared with prior years”. The adjusted effective tax rate is expected to be in the range of approximately 35 to 40 per cent for the 2017 financial year.
BHP suffered a record full year loss of $US6.39 billion after plummeting oil and iron ore prices and the Samarco mine disaster wreaked havoc with its bottom line.
The company said of the total payments, it paid almost two thirds, or $US2.52 billion, in Australia alone.
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Apart from Singapore, BHP Billiton also has subsidiaries in low-tax jurisdictions Panama, British Virgin Islands, Guernsey, Bermuda and the Cayman Islands.
