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The Australian tax authority has settled a transfer pricing dispute with BHP in relation to the mining giant’s marketing operations in Singapore.
The dispute related to the amount of Australian tax payable as a result of the sale of BHP’s Australian commodities to BHP’s Singapore marketing business. The ATO had issued amended assessments for AUD661m for the income years 2003 to 2013.
As part of the settlement, BHP will pay a total of approximately AUD529m in additional taxes for the income years 2003 to 2018.
BHP has already paid AUD328m of this amount.
In addition, from July 2019, BHP Group Limited will increase its ownership of BHP Billiton Marketing AG, which is the main company conducting BHP’s Singapore marketing business, from 58 percent to 100 percent. The change in ownership will result in all profits made in Singapore in relation to the Australian assets owned by BHP Group Limited being fully subject to Australian tax.
Peter Beaven, BHP’s Chief Financial Officer, said: “This is an important agreement and we are pleased to resolve this longstanding matter. The AUD529m payable under the settlement is in addition to the more than AUD75bn in Australian taxes and royalties that has already been paid by BHP over that same period.”