The Australian Taxation Office has agreed on a settlement with BHP Mining Group to resolve a transfer pricing dispute relating to transfer pricing treatment of commodities sold to a Singapore marketing hub.
BHP had originally been assessed with over AUD 1 billion in additional taxes. According to the settlement BHP will pay additional tax of AUD 529 million to resolve the dispute, covering the years 2003–18.
According to the settlement BHP Group will also increase its ownership of BHP Billiton Marketing AG, the 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 being fully subject to Australian tax.
BHP’s Singapore marketing arrangements will continue to be located in Singapore and will also be within the ‘low risk’ segment for offshore marketing hubs.