One of the world’s largest mining companies has settled a tax bill for half a billion Australian dollars.
Authorities alleged that BHP Billiton owes a further AU$661m (£376m) in tax, and over AU$1bn when including interest and penalties, on goods sold through its Singapore-based marketing business.
The Australian Taxation Office (ATO) said that between 2003 and 2013 the miner used its 58 per cent stake in BHP Billiton Marketing AG to market and sell products in Singapore which were mined in Australia.
It claimed the Sydney and London-listed company owed tax on the sales it had made through Singapore.
BHP has now settled the bill for AU$529m (£300m), without admitting any fault over its tax arrangements. It has already paid AU$328m of this.
As part of the deal, BHP will make the Singaporean company a fully-owned subsidiary. This will bring it into the ATO’s so-called green zone, making it taxable in Australia.
Finance chief Peter Beaven said: “This is an important agreement and we are pleased to resolve this long-standing matter.
“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: “While confidentiality provisions prevent us from commenting on specific details of the settlement, we are confident that a fair and reasonable outcome has been achieved for the Australian community,” he said.
“However, the more important announcement is that going forward, BHP is coming within the ATO’s so-called green zone for marketing hubs, and all the profits from their sale of Australian owned commodities will be taxed in Australia.”