21 September 2016
Taxation in
Australia
BHP Billiton has paid approximately
A$65 billion in taxes and royalties
in Australia over the past 10 years.
20
18
16
60
58.6
Average Global ETR
(adjusted) over
last 10 years:
31.9%
Average Global ETR
(adjusted) including
royalties over last
10 years: 39.8%
In FY16, the Australian ETR
(corporate tax - adjusted) was
30.3% and once PRRT and
royalties are included, 56.6%
55
50
14
45
41.1
10
8
33.1
29.6
31.4
30.4
36.3
31.0
37.9
32.1
34.2
30.5
8,945
4,030
40
35.8
32.5
30
25
6,260
5,313
4,885
35
31.8
8,764
6,736
6,623
40.8
37.3
8,831
6
4
38.1
34.2
40.1
%
(A$ million)
12
20
3,461
2
15
0
10
FY07
FY08
FY09
Taxes and royalties paid
in Australia
FY10
FY11
FY12
FY13
Global effective
tax rate (adjusted)
FY14
FY15
FY16
Global effective tax rate (adjusted)
including royalties
In FY16, we made the following contributions in Australia:
Revenue and other income
US$20 billion
Shareholder dividends
US$2.5 billion
Payments to suppliers
US$8 billion
Interest payments
US$114 million
Wages and benefits
paid to employees
US$2.5 billion
Taxes and royalties
A$3.5 billion
Total contribution
US$15.5 billion
The more value BHP Billiton creates
globally, the more taxes and royalties
it pays in Australia where most of our
commodities are produced.
Australia
Singapore
Exploration and Evaluation
Customer relationships
• Identify new resources
• Evaluate new and existing projects
• Acquisition and divestment opportunities
• Face to face contact
• Sell direct to end customers
• 72% of product is sold in Asia
Technical marketing
• Understand customer requirements
• Unlock value in the resource
• Maximise price for our commodities
Production
Market analysis
• Focus on safety, productivity
and sustainability
• Maximise production output
• Minimise cost
• Increase efficiency
• Understand global markets
• Informs capital allocation and strategy
Shipping
• Centralised freight desk
• Largest bulk dryshipper in the world
• Chartered 1400 ships in FY16
BHP Billiton pays tax on all of its profits generated in
Australia from the production of commodities. In addition,
it pays royalties in Australia on its Australian commodities.
BHP Billiton has paid approximately A$65 billion in
taxes and royalties in Australia over the last 10 years.
BHP Billiton has occasional disagreements with tax
authorities. In this respect, BHP Billiton is no different
from other large corporations.
BHP Billiton has disclosed that it currently has a transfer
pricing dispute with the Australian Taxation Office
(ATO) in relation to the price at which it sells Australian
commodities to our Singapore Marketing business.
This is a valuation issue.
The primary tax in dispute is less than 2 per cent of the
taxes and royalties BHP Billiton paid in Australia over
the period of the dispute.
Tax is paid in Australia on around 58% of the profits
generated by Marketing Singapore relating to Australian
commodities. As a result, BHP Billiton paid an additional
A$1 billion of tax in Australia on revenue generated in
Singapore over the last 10 years.
Marketing Singapore's global profit averaged less than
6 per cent of Australian taxable profits over the last 10 years.