BHP BHP Group Limited

   By Rhiannon Hoyle 
 

SYDNEY--BHP Billiton Ltd. (BHP.AU) said Australia's tax office has sought 1 billion Australian dollars (US$756 million) in additional taxes, interest and penalties from the mining company in a dispute over the price at which it sold commodities to its Singapore-based marketing business over more than a decade.

BHP said it will contest the bill from the Australian Taxation Office and take court action if needed, arguing the price at which it sells commodities it digs up in Australia are in line with international guidelines and market rates.

The Melbourne, Australia-based company, the world's No. 1 miner by market value, last year said it was being probed by the country's tax office as executives faced questions from lawmakers over whether BHP was using its Singapore unit to minimize tax bills. Australia has followed other nations in Europe and elsewhere in seeking to close taxation loopholes allegedly being used by some of the world's biggest companies to divert profits to lower tax jurisdictions.

On Wednesday, BHP said the Australian Taxation Office has issued it with A$1.02 billion in so-called amended assessments, which includes A$661 million of primary tax, for its 2003-2013 fiscal years.

BHP said it will contest all of the revised assessments, although head of tax Jane Michie said the miner would consider a settlement with the tax office. "If we are too far apart, the way to resolve it is to go to court," she said.

BHP said it has made partial payments on some of the claims from the tax office.

BHP and rival Rio Tinto PLC (RIO.LN), which also has a Singapore marketing unit, have argued their presence in the tiny city-state is critical for marketing commodities such as iron ore, a key steelmaking ingredient, to Asian buyers.

Chief Financial Officer Peter Beaven said the Singapore business "created value" for BHP and that the prices it charged were not abnormal. "We are very confident the prices that we charge are in accordance" with Organisation for Economic Co-operation and Development guidelines and in line with BHP's peers, said Mr. Beaven.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

September 20, 2016 19:47 ET (23:47 GMT)

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