| Tue 17 Sep 2019, 7:06 | | BHP GROUP PLC - BHP Economic Contribution Report Extract 2019 |
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BHP Economic Contribution Report Extract 2019:
BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP
ISIN: GB00BH0P3Z91
Issued by: BHP Group Plc
Date: 17 September 2019
To: London Stock Exchange
JSE Limited
For Release: Immediately
Contact: Helen Ratsey +44 (0) 20 7802 7540
BHP Group Plc - Economic Contribution Report 2019
Introduction
Our Economic Contribution Report (Report) for the year ended 30 June 2019 was released today.
BHP has a long-standing commitment to transparency. We believe it enhances understanding, builds trust
and holds us and others to account.
We've disclosed details of our tax and royalty payments for more than 19 years and during that time we
have continually updated and expanded our disclosures. As in prior years, this Report discloses our total
direct economic contribution, including the taxes and royalties we paid on a country-by-country and project-
by-project basis. We also disclose additional voluntary information, such as details of each of our
subsidiary entities in tax haven' countries and tax incentives we have been granted by some of our host
governments. In addition, we disclose our intra- group transactions and relationships with tax authorities
in compliance with the Australian Voluntary Tax Transparency Code.
The Report complies with a number of different transparency regimes. The information on our payments to
governments is set out in accordance with the UK Regulations, which implement the EU Accounting
Directive. By issuing the Report, we comply with the Australian Voluntary Tax Transparency Code. Beyond
these requirements, this year, we disclose more information including additional reconciliation data,
comparative data from prior years and further information regarding our approach to tax risk management
and governance. Also, we support the voluntary disclosure of country-by-country reports that contain
quantitative data, such as revenue from related and unrelated parties, profit/(loss) before tax, and number
of employees for each country in which a subsidiary entity of a corporate group is tax resident. We will be
publishing our country-by-country data for FY2019, separately to this Report. In addition, in this Report we
include details of our settlement with the Australian Taxation Office (ATO) of the long-standing transfer
pricing dispute concerning the value at which commodities are sold to our Singapore Sales and Marketing
business. The settlement resolved this dispute for all prior years (from 2003 onwards) and also provides
certainty for both the ATO and BHP regarding the taxation treatment of our Singapore Sales and Marketing
business for future years.
Our Economic Contribution Report 2019 has today been submitted to the National Storage Mechanism
and will shortly be available for inspection at: www.morningstar.co.uk/uk/NSM. It is also available to be
downloaded on the BHP website at:
https://www.bhp.com/investor-centre/-/media/documents/investors/annual-
reports/2019/bhpeconomiccontributionreport2019.pdf
BHP's purpose is to bring people and resources together to build a better world. We are proud of the
valuable contribution we make to the communities where we operate and to society as a whole. The
economic contribution we make is an important part of this. Our total direct economic contribution for
FY2019 was US$46.2 billion.This includes payments to suppliers, wages and benefits for our more than
72,000 employees and contractors, dividends, taxes and royalties, and US$93.5 million voluntarily
invested in social projects across the communities where we operate.
In FY2019, our tax, royalty and other payments to governments totalled US$9.1 billion. Of this, 78.7 per
cent or US$7.1 billion was paid in Australia. During the last decade, we paid US$84.3 billion globally in
taxes, royalties and other payments, including US$62.5 billion (approximately A$71 billion) in Australia.
Below are extracted sections of our full Economic Contribution Report 2019 that together meet the UK
Regulations.
Sponsor: UBS South Africa (Pty) Limited
Our payments to governments
BHP has prepared this information in accordance with the UK Regulations. Our Report addresses BHP's reporting obligations under DTR 4.3A of the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules. The Basis of preparation' and Glossary' contain information about the content of the Report and form part of
the Report.
Payments made by country and level of government
The information on taxes paid by classification and country presented below has been prepared on the basis set out in the Basis of report preparation' section of the
Report.
Signature, Total payments
Royalty- Total Payments for
Corporate Taxes levied Production discovery and as defined by Other Total payments
US$ millions related taxes Royalties Fees Infra-structure
income taxes on production entitlements production the UK payments to governments
income taxes paid improvements
bonuses Regulations
Total payments to governments 5393.2 491.4 157.2 6041.8 2500.2 164.7 84.1 0.7 0.0 8791.5 290.8 9082.3
Algeria(1) - - - - - 106.0 - - - 106.0 - 106.0
DIRECTORATE GENERAL OF TAXES - - - - - 106.0 - - - 106.0 - 106.0
Australia (4) 4252.0 392.4 37.1 4681.5 2206.8 - 24.7 - - 6913.0 232.9 7145.9
AUSTRALIAN TAXATION OFFICE 4252.0 392.4 37.1 4681.5 - - 2.6 - - 4684.1 40.3 4724.4
CENTRAL HIGHLANDS REGIONAL COUNCIL - - - - - - - - - - 2.4 2.4
ISAAC REGIONAL COUNCIL (QUEENSLAND) - - - - - - - - - - 7.8 7.8
MACKAY REGIONAL COUNCIL (QUEENSLAND) - - - - - - - - - - 0.5 0.5
SHIRE OF ASHBURTON (WESTERN AUSTRALIA) - - - - - - - - - - 0.4 0.4
SHIRE OF EAST PILBARA (WESTERN AUSTRALIA) - - - - - - - - - - 0.9 0.9
SHIRE OF LEONARA (WESTERN AUSTRALIA) - - - - - - - - - - 0.7 0.7
SHIRE OF WILUNA (WESTERN AUSTRALIA) - - - - - - - - - - 0.9 0.9
STATE OF NEW SOUTH WALES - - - - 116.3 - 1.4 - - 117.7 6.7 124.4
STATE OF QUEENSLAND - - - 801.8 - 1.0 - - 802.8 49.3 852.1
STATE OF SOUTH AUSTRALIA - - - - 48.3 - 3.9 - - 52.2 16.5 68.7
STATE OF VICTORIA - - - - - - - - - - 6.2 6.2
STATE OF WESTERN AUSTRALIA - - - 1078.3 - 15.7 - - 1094.0 87.6 1181.6
TOWN OF PORT HEDLAND (WESTERN AUSTRALIA) - - - - - - - - - - 12.1 12.1
WESTERN AUSTRALIA DEPARTMENT OF MINES AND
- - - - 162.1 - - - - 162.1 - 162.1
PETROLEUM
OTHER AUSTRALIAN GOVERNMENTS - - - - - - 0.1 - - 0.1 0.6 0.7
Brazil 23.4 - 0.8 24.2 - - - - - 24.2 7.5 31.7
FEDERAL TAX REVENUE MINISTRY 23.4 - 0.8 24.2 - - - - - 24.2 7.5 31.7
Canada 39.6 - - 39.6 - - 9.5 0.7 - 49.8 3.8 53.6
CANADA REVENUE AGENCY 39.3 - - 39.3 - - - - - 39.3 0.7 4-
FINANCES QUEBEC 0.3 - - 0.3 - - - 0.2 - 0.5 - 0.5
GOVERNMENT OF SASKATCHEWAN - - - - - - 8.9 0.3 - 9.2 0.1 9.3
NATURAL RESOURCES CANADA - - - - - - 0.6 - - 0.6 - 0.6
RURAL MUNICIPALITY OF LEROY (SASKATCHEWAN) - - - - - - - 0.1 - 0.1 2.9 3.0
RURAL MUNICIPALITY OF PRAIRIE ROSE
- - - - - - - 0.1 - 0.1 - 0.1
(SASKATCHEWAN)
OTHER CANADIAN GOVERNMENTS - - - - - - - - - - 0.1 0.1
Chile (2) 1003.7 99.0 - 1102.7 - - 21.6 - - 1124.3 3.5 1127.8
SERVICIO DE IMPUESTOS INTERNOS 1003.7 99.0 - 1102.7 - - 21.6 - - 1124.3 3.5 1127.8
China 1.6 - - 1.6 - - - - - 1.6 - 1.6
CHINA TAX BUREAU 1.6 - - 1.6 - - - - - 1.6 - 1.6
Colombia 2.3 - - 2.3 - - - - - 2.3 - 2.3
THE NATIONAL DIRECTORATE OF TAXES AND
2.3 - - 2.3 - - - - - 2.3 - 2.3
CUSTOMS
India 0.5 - - 0.5 - - - - - 0.5 - 0.5
INCOME TAX DEPARTMENT 0.5 - - 0.5 - - - - - 0.5 - 0.5
Japan 0.2 - - 0.2 - - - - - 0.2 - 0.2
NATIONAL TAX AGENCY 0.2 - - 0.2 - - - - - 0.2 - 0.2
Malaysia 1.5 - - 1.5 - - - - - 1.5 - 1.5
INLAND REVENUE BOARD 1.5 - - 1.5 - - - - - 1.5 - 1.5
Mexico 1.5 - - 1.5 - - 1.1 - - 2.6 5.5 8.1
MEXICAN FEDERAL TAX ADMINISTRATION 1.5 - - 1.5 - - 1.1 - - 2.6 0.9 3.5
OTHER MEXICAN GOVERNMENT - - - - - - - - - - 4.6 4.6
Peru 18.1 - - 18.1 - - 1.2 - - 19.3 0.2 19.5
REPUBLICA DEL PERU - - - - - - 1.2 - - 1.2 - 1.2
THE NATIONAL SUPERINTENDENCY OF CUSTOMS
18.1 - - 18.1 - - - - - 18.1 0.2 18.3
AND TAX ADMINISTRATION
Philippines - - - - - - - - - - 0.4 0.4
BUREAU OF INTERNAL REVENUE - - - - - - - - - - 0.4 0.4
Singapore 2.0 - - 2.0 - - - - - 2.0 - 2.0
INLAND REVENUE AUTHORITY OF SINGAPORE 2.0 - - 2.0 - - - - - 2.0 - 2.0
South Africa 0.3 - - 0.3 - - - - - 0.3 - 0.3
SOUTH AFRICAN REVENUE SERVICE 0.3 - - 0.3 - - - - - 0.3 - 0.3
Switzerland 3.1 - - 3.1 - - - - - 3.1 - 3.1
CANTON OF ZUG 3.1 - - 3.1 - - - - - 3.1 - 3.1
Trinidad and Tobago (3) 0.7 - - 0.7 - 58.7 14.3 - - 73.7 2.1 75.8
BOARD OF INLAND REVENUE 0.7 - - 0.7 - 58.7 14.3 - - 73.7 2.1 75.8
United Kingdom 49.2 - - 49.2 - - - - - 49.2 4.6 53.8
CITY OF WESTMINSTER - - - - - - - - - - 0.9 0.9
HER MAJESTY'S REVENUE not payments to governments as holders
of ordinary shares in BHP. There were no dividend payments to governments for the year ended 30 June 2019.
Signature, discovery or production bonuses
Payments to governments upon signing an oil and gas lease, when discovering natural resources, and/or when
production has commenced. There were no payments of signature, discovery or production bonuses to
governments for the year ended 30 June 2019.
Other payments
Payments to governments under other legislated tax rules such as payroll tax, fringe benefits tax, excise duties,
property tax, land tax and black lung tax. These payments are not specifically required to be disclosed by the
UK Regulations.
Excluded amounts
The following are not included in total payments to governments:
Taxes collected
Tax payments made to governments on behalf of our employees.
Indirect taxes
Tax payments made to, or received from, governments in the nature of sales tax, value added tax and goods
and services tax.
Penalties and interest
Payments to governments resulting from the imposition of penalties, fees or interest.
Other
Certain payments, whether made as a single payment or as a series of related payments below US$100,000
(being a lower amount than the P86,000 threshold set out in the UK Regulations).
Projects
Payments made on a project-by-project basis (Payments made on a project-by-project basis section of this
Report) present payments by entity when not specifically attributable to a project.
Payments in relation to Corporate Head Office and the Commercial function have been included in the Total
payments to governments as defined by the UK Regulations. The payments are not attributable to specific
projects. Corporate Head Office' and Commercial Offices' comprise functional support for the Group that in
FY2019 consists entirely of projects that undertake relevant activities as defined by the UK Regulations.
The Payments made on a project-by-project basis section presents corporate income tax amounts for each
project/entity taking into account the effects of tax consolidation in Australia. These include the following:
* losses from one entity can be offset against taxable income of another entity within the same tax consolidated
group;
* only the head entity of a tax consolidated group is liable to make corporate income tax payments to the Australian
Tax Office (ATO); * typically, corporate tax groups allocate the aggregate corporate income tax payments made
by the head entity to the ATO amongst entities within the Australian tax consolidated group.
Reporting currency
All payments to governments on pages 18 to 23 have been reported in US dollars. Payments denominated in
currencies other than US dollars are translated for this Report at the exchange rate at the date of the payment.
Discontinued operations
Following BHP's sale of the Onshore US assets announced on 27 July 2018, the contribution of these assets to
the Group's tax payments are presented in this Report as Discontinued operations (refer to Section 5 in the
Annual Report 2019 for more information on the accounting treatment). To enable more meaningful comparisons
with prior year disclosures, and to comply with applicable statutory requirements, this Report includes data from
Continuing and Discontinued operations, unless specified otherwise. Refer to the Glossary section for definitions
of reported data.
Glossary
Adjusted effective tax rate
Total taxation expense for our Continuing operations excluding exceptional items and exchange movements
included in taxation expense divided by Profit for our Continuing operations before taxation and exceptional
items.
Adjusted effective tax and royalty rate
Total taxation expense for our Continuing operations excluding exceptional items and exchange movements
included in taxation expense plus royalty expense divided by Profit for our Continuing operations before taxation,
royalties and exceptional items.
BHP or the Group
BHP Group Limited and BHP Group Plc and their respective subsidiaries.
Current tax expense
The amount of corporate income tax and royalty-related income tax and production entitlements currently payable
and attributable to the year, measured at rates enacted or substantively enacted at year-end, together with any
adjustment to those taxes payable in respect of previous years.
Deferred tax expense
The amount of corporate income tax and royalty-related income tax and production entitlements attributable to
the current year but payable in future years provided using the balance sheet liability method.
Employees and contractors
The weighted average number of employees and contractors across the Group is calculated from the actual
number of employees on the last day of the month over the 10-month period from July 2018 to April 2019 at each
BHP-controlled site. It includes the Executive Director, 100 per cent of employees of subsidiary companies and
our share of proportionate consolidated entities. Employees of equity accounted entities are not included. Part-
time employees are included on a full-time equivalent basis. Employees of businesses acquired or disposed of
during the year are included for the period of ownership.
Government
Any national, regional or local authority of a country (includes a department, agency or undertaking that is a
subsidiary undertaking where the authority is the parent undertaking).
Income tax expense
The total of current tax expense and deferred tax expense.
Low-tax jurisdictions
In classifying which countries are low-tax jurisdictions', we have applied the EU list of non-cooperative
jurisdictions for tax purposes, issued in December 2017 by the European Union and subsequently updated. The
updated list used in this Report was issued in June 2019.
Payments to shareholders, lenders and investors Geographical distribution is based on the registered address
of shareholders (for returns to shareholders including dividends) and country of incorporation of the borrower for
interest payments and loan repayments.
Profit before taxation
Profit before taxation when presented by country is adjusted for intercompany dividends.
Project
Consistent with the UK Regulations, a project is defined as the operational activities that are governed by a single
contract, licence, lease, concession or similar legal agreements and form the basis for payment liabilities with a
government. If multiple such agreements are substantially interconnected', they may be considered a project.
For these purposes, substantially interconnected' means forming a set of operationally and geographically
integrated contracts, licences, leases or concessions or related agreements with substantially similar terms
that are signed with a government, giving rise to payment liabilities.
Report
The Report has been prepared for BHP's financial year from 1 July 2018 to 30 June 2019.
Social investment
Includes community contributions and associated administrative costs (including costs borne by BHP to facilitate
the operation of the BHP Foundation), and BHP's equity share in community contributions for both operated and
non-operated joint ventures.
UK Regulations
The Reports on Payments to Governments Regulations 2014, as amended by the Reports on Payments to
Governments (Amendment) Regulations 2015. The UK Regulations implement the EU Accounting Directive
(Chapter 10, Directive 2013/34/EU) in the United Kingdom.
BHP Group Plc Registration number 3196209
Registered in England and Wales
Registered Office: Nova South, 160 Victoria Street, London SW1E 5LB United Kingdom
A member of the BHP Group which is headquartered in Australia
Date: 17/09/2019 07:05:00
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