BHP Billiton discloses tax payment breakdown

OREANDA-NEWS. September 24, 2015. UK-Australian resources firm BHP Billiton has provided a country breakdown of its tax and royalty payments, in a sign of what may become the future standard of reporting with more clarity sought over corporate tax payments to reduce tax avoidance.

The UK and the EU have already passed laws requiring listed companies to declare tax payments in each of the countries in which they operate. Australia last month introduced legislation that parliament will consider for similar measures to be applied to Australia-listed firms.

BHP Billiton said it paid \\$7.3bn globally in taxes, royalties and other payments to governments in the 2014-15 fiscal year to 30 June. These payments equated to a global adjusted effective tax rate for the company of 31.8pc, compared with the OECD average corporate income tax rate of 25pc.

The company has previously disclosed the total amount of taxes and royalties it has paid, but not on a country-by-country breakdown. The majority of the taxes were paid in Australia totalling \\$5.25bn, where the company has extensive operations in iron ore, coking coal and thermal coal operations, as well as oil and gas and copper production.

The US was third where the company paid \\$644mn in taxes and royalties. BHP Billiton has onshore shale oil and gas operations in Texas, as well as interests in deepwater oil wells in the Gulf of Mexico. Chile was second where it paid \\$1.12bn from its copper operations, which include a controlling interest in Escondida and the Pampa Norte copper mines.

It also has petroleum operations in Algeria, Canada, Pakistan, Trinidad & Tobago and the UK where it also disclosed its tax payments. The tax payment details were contained in BHP Billiton's sustainability report.

BHP Billiton also paid \\$6mn in taxes and royalties in Singapore where it has a marketing office for its iron ore and coal production from Australia. The company has come under scrutiny about the use of Singapore where corporate tax levels are much lower than Australia.

It is in a dispute with the Australian Tax Office over a A\\$522mn (\\$370mn) tax bill for booking mining profits through its Singapore marketing office. The Singapore-based BHP Billiton Marketing business is 58:42pc owned by its Australia- and UK-listed entities. It said 58pc of profits from the Singapore business are subject to Australia's corporate tax rate of 30pc, with the remaining 42pc subject to UK corporate tax rates.