BHP Billiton has been hit with a $522 million bill that the Tax Office says it owes for tax avoidance through its Singapore marketing operations.
The company has responded to questions from the Senate inquiry into tax avoidance saying it is contesting the Tax Office assessments, which are continuing.
Of the $522 million, $221 million are penalties for alleged tax avoidance.
Reuters reported that $522 million in tax bills also include contested tax plus interest and penalties owed on transfer pricing, the price at which BHP’s Australian entities sell commodities they mine to the Singapore marketing business.
“BHP Billiton has objected to these assessments,” Reuters reported the company as saying.
This unexpected tax bill comes at a time when the iron ore industry is struggling to turn a profit in a low-price environment. That said, the price of iron ore has rallied in recent days to hit $57 a tonne, up from under $47 two weeks ago.
As the lowest-cost iron ore producer in the world, BHP Billiton is one of the few mining companies that has managed to continue turning a profit since prices plummeted.
As yet the surprise tax bill has had no apparent affect on BHP’s share price, which has risen for the fifth day in a row.
BHP Billiton is Australia’s biggest listed company, and also its biggest corporate taxpayer.
– with AAP