BHP readies for tax fight as Australia cracks down on offshore hubs

Wed Sep 21, 2016 6:21am EDT
 
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By James Regan

SYDNEY (Reuters) - BHP Billiton (BHP.AX: Quote)(BLT.L: Quote) has threatened court action against the Australian government over demands it pay $767 million in back taxes and penalties stemming from its use of a foreign tax haven amid a national crackdown on corporate tax loopholes.

Australia is chasing the mining giant and other multi-national firms for taxes it claims they owe on profits; in BHP's case channeled through the more tax-friendly Singapore.

BHP will initiate court action if needed against an assessment by the Australian Tax Office (ATO) that the miner pay amended back taxes spanning a 11-year period between 2003 and 2013, said the miner's chief financial officer, Peter Beaven.

"BHP Billiton does not agree with the ATO's position," Beaven said, while releasing the company's fiscal 2016 report on its global tax bill.

"Consequently, we have objected to all of the amended assessments and intend to continue to defend our position, including by initiating court action if necessary," he added.

The dispute with BHP comes at a time when the ATO has increased scrutiny over how much tax hundreds of multi- nationals operating in Australia pay.

Prime Minister Malcolm Turnbull, under criticism for being soft on big business, has outlined a new task force led by the ATO, and tighter rules to close tax loopholes and raise up to A$3.3 billion ($2.49 billion).

"Steps are being taken, but there's no question that not enough is being done," said Scott Ludlam, a Greens Party senator in Western Australia, where much of the country's minerals are mined. "So many of these companies are well-versed in the tax codes and fight back tooth and nail."   Continued...

 
A promotional sign adorns a stage at a BHP Billiton function in central Sydney, Australia August 20, 2013. REUTERS/David Gray/File Photo