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BHP makes $529m deal with ATO over Singapore marketing

  • Tuesday, November 20, 2018
  • Source:ferro-alloys.com

  • Keywords:BHP, deal, Australian Taxation Office, Singapore
[Fellow]BHP makes $529m deal with ATO over Singapore marketing

[ferro-alloys.com]BHP has struck a $529 million deal with the Australian Taxation Office to settle a transfer pricing dispute over its Singapore marketing operations.

The agreement will also see BHP take full ownership of the Singapore entity, which BHP said would make all its profits relating to Australian assets subject to Australian tax.

The mining giant said it had already paid $328 million of the agreed amount, after receiving amended tax assessments from the ATO.

The ATO had sought $1.04 billion in assessments, interest and penalties from BHP for the income years 2003 to 2013.

BHP said the settlement fully resolved the dispute with no admission by the company of tax avoidance.

BHP’s marketing operations will continue to based in Singapore.

The dispute concerned the amount of Australian tax payable from the sale of BHP’s Australian commodities to the Singapore business.

"This is an important agreement and we are pleased to resolve this longstanding matter," BHP chief financial officer Peter Beaven said.

"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," Mr Beaven said.

"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."

ATO Deputy Commissioner Jeremy Hirschhorn said the agency generally agreed to a settlement after considering the risk to revenue, value of the dispute, and likelihood of success in litigation.

“I want to assure the Australian community the ATO does not settle matters at any cost or give favourable settlements to the large end of town,” Mr Hirschhorn said.

“In fact, the evidence clearly shows that settlements with public and multinational businesses are consistently tougher than in any other market.”

Mr Hirschhorn said the most important outcome from the BHP case was that the miner was coming within the ATO’s “green zone” for marketing hubs.

“This is a landmark and precedential development in the execution of our marketing hubs strategy, and sends a strong signal to other industry participants,” he said.

“Given the importance of mining and natural resources to the Australian economy, it is critical that exporters of Australian commodities, whether iron ore, coal, gas or other commodities, pay the correct tax in Australia on their profits.

“The ATO has had a significant focus on marketing hub arrangements to ensure profits generated in Australia, are taxed in Australia.”

(The Western Australian)

  • [Editor:王可]

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