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BHP Economic Contribution Report Extract 2018
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
Issued by: BHP Billiton Plc
Date: 18 September 2018
To: London Stock Exchange
JSE Limited
For Release: Immediately
Contact: Helen Ratsey +44 (0) 20 7802 7540
BHP Billiton Plc - Economic Contribution Report 2018
Introduction
------------
Our Economic Contribution Report ("Report") for the year ended 30 June 2018 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 18 years
and during that time we have continually updated and expanded our disclosures.
As in prior years, the 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.
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 for the first time our profit,
number of employees and effective tax rates in the key countries in which we
operate.
The full Report in PDF and in XML format have today been submitted to the National
Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.
uk/uk/NSM.
They are also available to be downloaded on the BHP website at:
PDF: https://www.bhp.com/investor-centre/-/media/documents/investors/annual-reports/
2018/bhpeconomiccontributionreport2018.pdf
XML format: https://www.bhp.com/investor-centre/-/media/documents/investors/annual-reports/
2018/bhpeconomiccontributionreport2018.xml
We are proud of the value we generate and how this contributes to building
trust with the communities in which we operate. The economic contribution we
make is an important part of this. Our total direct economic contribution for
FY2018 was US$33.9 billion. This included payments to suppliers, wages and
benefits for our more than 62,000 employees and contractors, dividends, taxes
and royalties, and US$77.1 million voluntarily invested in social projects
across our host communities.
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In FY2018, our tax, royalty and other payments to governments totalled
US$7.8 billion. Our global adjusted effective tax rate was 31.4 per cent. Once
royalties are included, our rate increases to 39.9 per cent.
Below are extracted sections of our full Economic Contribution Report 2018 that
together meet the UK Regulations.
Sponsor: UBS South Africa (Pty) Limited
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Our payments to governments
---------------------------
BHP has prepared this information in accordance with the UK Regulations. Our
Report addresses BHP's reporting obligations under DTR 4.3A of the Financial
Conduct Authority's Disclosure Guidance and Transparency Rules. The 'Basis of
preparation' and 'Glossary' contain information about the content of the Report
and form part of the Report.
Payments made by country and level of government
The information on taxes paid by classification and country presented below has
been prepared on the basis set out in the 'Basis of report preparation' section
of the Report.
Signature, Total
Royalty- discovery payments
Corporate related Taxes Total Payments for and as defined Total
income income levied on taxes Production infrastructure production by the UK Other payments to
US$ millions taxes taxes production paid Royalties entitlements Fees improvements bonuses Regulations payments governments
------------ --------- -------- ---------- -------- --------- ------------ -------- -------------- ---------- ----------- -------- ------------
Total payments to governments................ 4,245.2 551.2 130.1 4,926.4 2,279.5 180.4 90.6 0.7 5.3 7,482.9 286.2 7,769.1
Algeria (1).................................. -- -- -- -- -- 128.8 -- -- -- 128.8 -- 128.8
DIRECTORATE-GENERAL OF TAXES................. -- -- -- -- -- 128.8 -- -- -- 128.8 -- 128.8
Australia.................................. 3,158.0 488.2 43.8 3,690.0 2,067.4 -- 20.0 -- -- 5,777.3 234.1 6,011.4
AUSTRALIAN TAXATION OFFICE................... 3,158.0 488.2 43.8 3,690.0 125.6 -- 1.0 -- -- 3,816.7 45.2 3,861.9
CENTRAL HIGHLANDS REGIONAL COUNCIL........... -- -- -- -- -- -- -- -- -- -- 2.7 2.7
CITY OF KALGOORLIE-BOULDER................... -- -- -- -- -- -- -- -- -- -- 0.1 0.1
CITY OF ROCKINGHAM........................... -- -- -- -- -- -- -- -- -- -- 0.1 0.1
ISAAC REGIONAL COUNCIL (QUEENSLAND).......... -- -- -- -- -- -- -- -- -- -- 9.5 9.6
MACKAY REGIONAL COUNCIL (QUEENSLAND)......... -- -- -- -- -- -- -- -- -- -- 0.6 0.6
SHIRE OF ASHBURTON (WESTERN AUSTRALIA)....... -- -- -- -- -- -- -- -- -- -- 0.4 0.4
SHIRE OF EAST PILBARA (WESTERN AUSTRALIA).... -- -- -- -- -- -- -- -- -- -- 3.8 3.8
SHIRE OF LEONARA (WESTERN AUSTRALIA)......... -- -- -- -- -- -- -- -- -- -- 0.7 0.7
SHIRE OF MUSWELLBROOK (NEW SOUTH WALES)...... -- -- -- -- -- -- -- -- -- -- 1.1 1.1
SHIRE OF WILUNA (WESTERN AUSTRALIA).......... -- -- -- -- -- -- -- -- -- -- 0.9 0.9
STATE OF NEW SOUTH WALES..................... -- -- -- -- 107.5 -- 1.1 -- -- 108.5 8.7 117.2
STATE OF QUEENSLAND.......................... -- -- -- -- 699.4 -- 5.2 -- -- 704.6 47.2 751.8
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BHP Billiton Plc - 3
Economic Contribution Report 2018
STATE OF SOUTH AUSTRALIA..................... -- -- -- -- 46.1 -- 1.3 -- -- 47.4 13.4 60.8
STATE OF VICTORIA............................ -- -- -- -- -- -- -- -- -- -- 9.0 9.0
STATE OF WESTERN AUSTRALIA................... -- -- -- -- 1,088.7 -- 10.6 -- -- 1,099.3 87.3 1,186.6
TOWN OF PORT HEDLAND (WESTERN AUSTRALIA)..... -- -- -- -- -- -- 0.7 -- -- 0.7 3.1 3.9
OTHER AUSTRALIAN GOVERNMENTS................. -- -- -- -- -- -- -- -- -- -- 0.2 0.2
Brazil..................................... 50.3 -- -- 50.3 -- -- -- -- -- 50.4 11.4 61.8
FEDERAL TAX REVENUE MINISTRY................. 50.3 -- -- 50.3 -- -- -- -- -- 50.4 11.4 61.8
Canada.................................... 47.7 -- -- 47.7 -- -- 8.8 0.7 -- 57.2 4.4 61.6
CANADA REVENUE AGENCY........................ 43.4 -- -- 43.4 -- -- 0.5 -- -- 43.9 0.9 44.7
FINANCES QUEBEC.............................. 4.3 -- -- 4.3 -- -- -- 0.2 -- 4.5 -- 4.5
GOVERNMENT OF SASKATCHEWAN................... -- -- -- -- -- -- 8.2 -- -- 8.2 0.2 8.4
MINISTRY OF FINANCE - ONTARIO................ -- -- -- -- -- -- -- -- -- -- -- 0.1
RURAL MUNICIPALITY OF LEROY (SASKATCHEWAN)... -- -- -- -- -- -- -- 0.4 -- 0.4 3.1 3.5
RURAL MUNICIPALITY OF PRAIRIE ROSE
(SASKATCHEWAN)............................. -- -- -- -- -- -- -- 0.1 -- 0.1 0.1 0.2
OTHER CANADIAN GOVERNMENTS................... -- -- -- -- -- -- -- -- -- -- 0.1 0.1
Chile (2).................................. 974.3 63.0 -- 1,037.3 -- -- 14.7 -- -- 1,052.0 11.8 1,063.9
SERVICIO DE IMPUESTOS INTERNOS............... 974.3 63.0 -- 1,037.3 -- -- 14.7 -- -- 1,052.0 11.8 1,063.9
China...................................... 1.8 -- -- 1.8 -- -- -- -- -- 1.8 -- 1.8
CHINA TAX BUREAU............................. 1.8 -- -- 1.8 -- -- -- -- -- 1.8 -- 1.8
India...................................... 0.4 -- -- 0.4 -- -- -- -- -- 0.4 -- 0.4
INCOME TAX DEPARTMENT........................ 0.4 -- -- 0.4 -- -- -- -- -- 0.4 -- 0.4
Indonesia.................................. 0.1 -- -- 0.1 -- -- -- -- -- 0.1 -- 0.1
DIRECTORATE GENERAL OF TAXES................. 0.1 -- -- 0.1 -- -- -- -- -- 0.1 -- 0.1
Japan...................................... 0.4 -- -- 0.4 -- -- -- -- -- 0.4 -- 0.4
NATIONAL TAX AGENCY.......................... 0.4 -- -- 0.4 -- -- -- -- -- 0.4 -- 0.4
Mexico..................................... 0.9 -- -- 0.9 -- -- 2.5 -- -- 3.3 0.1 3.4
MEXICAN FEDERAL TAX ADMINISTRATION........... 0.9 -- -- 0.9 -- -- 2.5 -- -- 3.3 0.1 3.4
Peru....................................... 32.4 -- -- 32.4 -- -- -- -- -- 32.4 -- 32.4
THE NATIONAL SUPERINTENDENCY OF CUSTOMS AND
TAX ADMINISTRATION......................... 32.4 -- -- 32.4 -- -- -- -- -- 32.4 -- 32.4
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Singapore.................................. (0.9) -- -- (0.9) -- -- -- -- -- (0.9) -- (0.9)
INLAND REVENUE AUTHORITY OF SINGAPORE........ (0.9) -- -- (0.9) -- -- -- -- -- (0.9) -- (0.9)
South Africa............................... (0.3) -- -- (0.3) -- -- -- -- -- (0.3) -- (0.3)
SOUTH AFRICAN REVENUE SERVICE................ (0.3) -- -- (0.3) -- -- -- -- -- (0.3) -- (0.3)
Switzerland................................ 1.1 -- -- 1.1 -- -- -- -- -- 1.1 -- 1.1
CANTON OF ZUG................................ 1.1 -- -- 1.1 -- -- -- -- -- 1.1 -- 1.1
Trinidad and Tobago (3).................... 0.8 -- -- 0.8 -- 51.6 20.6 -- -- 73.0 -- 73.0
BOARD OF INLAND REVENUE...................... 0.8 -- -- 0.8 -- 51.6 20.6 -- -- 73.0 -- 73.0
United Kingdom............................. 24.8 -- -- 24.8 -- -- -- -- -- 24.8 1.7 26.5
CITY OF WESTMINSTER.......................... -- -- -- -- -- -- -- -- -- -- 1.2 1.2
HER MAJESTY'S REVENUE & CUSTOMS.............. 24.8 -- -- 24.8 -- -- -- -- -- 24.8 0.5 25.3
United States.............................. (11.3) -- -- (11.3) 169.0 -- 16.8 -- 5.3 179.7 3.2 182.9
ARIZONA DEPARTMENT OF REVENUE................ -- -- -- -- -- -- 0.7 -- -- 0.7 0.4 1.1
ARIZONA STATE LAND DEPARTMENT................ -- -- -- -- -- -- 0.5 -- -- 0.5 -- 0.5
CALIFORNIA FRANCHISE TAX BOARD............... -- -- -- -- -- -- -- -- -- -- -- 0.1
INTERNAL REVENUE SERVICE..................... -- -- -- -- -- -- 0.2 -- -- 0.2 -- 0.2
TEXAS COMPTROLLER............................ -- -- -- -- -- -- -- -- -- -- 2.3 2.3
U.S. NUCLEAR REGULATORY COMMISSION........... -- -- -- -- -- -- 0.2 -- -- 0.2 -- 0.2
US DEPARTMENT OF THE INTERIOR................ -- -- -- -- 169.0 -- 14.7 -- 5.3 189.0 -- 189.0
US DEPARTMENT OF THE TREASURY................ (11.4) -- -- (11.4) -- -- -- -- -- (11.4) 0.4 (11.0)
UTAH TAX COMMISION........................... -- -- -- -- -- -- 0.1 -- -- 0.1 -- 0.1
WASHINGTON DEPARTMENT OF REVENUE............. -- -- -- -- -- -- 0.3 -- -- 0.3 -- 0.3
United States (Discontinued Operations).... (35.3) -- 86.3 51.0 43.1 -- 7.2 -- -- 101.3 19.4 120.8
ARKANSAS DEPARTMENT OF FINANCE AND
ADMINISTRATION............................. -- -- 6.6 6.6 -- -- -- -- -- 6.6 2.9 9.5
COMMISSIONER FOR THE TEXAS GENERAL LAND
OFFICE..................................... -- -- -- -- 40.0 -- 6.3 -- -- 46.3 -- 46.3
DEPARTMENT OF NATURAL RESOURCES (LOUISIANA).. -- -- -- -- 2.5 -- 0.3 -- -- 2.8 -- 2.8
LOUISIANA DEPARTMENT OF REVENUE.............. -- -- 15.4 15.4 -- -- 0.2 -- -- 15.6 6.8 22.4
RAILROAD COMMISSION OF TEXAS................. -- -- 0.2 0.2 -- -- 0.1 -- -- 0.3 -- 0.3
TEXAS COMPTROLLER............................ -- -- 64.1 64.1 -- -- 0.3 -- -- 64.4 9.7 74.1
US DEPARTMENT OF THE INTERIOR................ -- -- -- -- 0.5 -- -- -- -- 0.6 -- 0.6
US DEPARTMENT OF THE TREASURY................ (35.3) -- -- (35.3) -- -- -- -- -- (35.3) -- (35.2)
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BHP Billiton Plc - 5
Economic Contribution Report 2018
Figures are rounded to the nearest decimal point.
(1) Production entitlements of 1.9 million barrels of oil equivalent (boe)
paid in-kind
(2) Income and mining taxes are paid in Chile on a calendar year basis.
However, for the purpose of this Report, taxes paid are included for BHP's
financial year (1 July 2017 to 30 June 2018). For reference, income tax and
specific tax on mining activities paid by Escondida and Pampa Norte for
CY2017 amount to US$340 million and US$195 million respectively.
(3) Production entitlements of 2.6 million boe paid in-kind.
Payments made on a project-by-project basis
Taxes paid by classification and project are presented in this section and have
been prepared on the basis set out in the a(Euro)(right angle quote)Basis of
report preparation' section of the Report.
Signature, Total
Royalty- discovery payments
Corporate related Taxes Total Payments for and as defined Total
income income levied on taxes Production infrastructure production by the UK Other payments to
US$ millions taxes taxes production paid Royalties entitlements Fees improvements bonuses Regulations payments governments
------------ --------- -------- ---------- -------- --------- ------------ -------- -------------- ---------- ----------- -------- ------------
Total payments to governments................ 4,245.2 551.2 130.1 4,926.5 2,279.5 180.4 90.6 0.7 5.3 7,482.9 286.2 7,769.1
Petroleum.................................... 375.7 488.2 43.8 907.6 294.6 180.4 40.7 0.2 5.3 1,428.8 21.0 1,449.8
Algeria Joint Interest Unit /(1)/............ (2.4) -- -- (2.4) -- 128.8 -- -- -- 126.4 -- 126.4
Australia Production Unit - Victoria......... 5.2 26.1 -- 31.3 -- -- -- -- -- 31.3 0.2 31.5
Australia Production Unit - Western
Australia ................................. (22.7) 152.8 -- 130.1 -- -- 1.7 -- -- 131.9 3.5 135.4
Bass Strait.................................. 109.8 309.2 -- 419.0 -- -- -- -- -- 419.0 13.4 432.4
Closed Mines................................. 31.1 -- -- 31.1 -- -- 1.1 0.2 -- 32.3 0.7 33.0
Gulf of Mexico............................... (18.8) -- -- (18.8) 169.0 -- 14.7 -- 5.3 170.1 2.7 172.8
Head Office-BHP Billiton Brasil
Investimentos Ltda......................... -- -- -- -- -- -- -- -- -- -- 0.2 0.2
Head Office-BHP Billiton Petroleum
International Pty Ltd...................... 4.8 -- -- 4.8 -- -- -- -- -- 4.8 -- 4.8
North West Shelf............................. 253.8 -- 43.8 297.6 125.6 -- 0.1 -- -- 423.3 -- 423.3
Trinidad and Tobago Production Unit /(2)/.... 0.8 -- -- 0.8 -- 51.6 20.6 -- -- 73.0 -- 73.0
UK Production Unit........................... 12.9 -- -- 12.9 -- -- -- -- -- 12.9 -- 12.9
Other........................................ 1.3 -- -- 1.3 -- -- 2.5 -- -- 3.7 0.4 4.1
Minerals Australia........................... 3,008.8 -- -- 3,008.8 1,941.8 -- 18.1 -- -- 4,968.7 206.4 5,175.2
Exploration - Minerals Australia............. 0.7 -- -- 0.7 -- -- -- -- -- 0.7 -- 0.7
Head Office - BHP Billiton MetCoal Holdings
Pty Ltd.................................... 10.2 -- -- 10.2 -- -- -- -- -- 10.2 3.7 13.8
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IndoMet...................................... 0.1 -- -- 0.1 -- -- -- -- -- 0.1 -- 0.1
New South Wales Energy Coal.................. -- -- -- -- 107.5 -- 1.1 -- -- 108.5 13.0 121.5
Nickel West.................................. 24.2 -- -- 24.2 21.4 -- 2.4 -- -- 48.1 13.0 61.1
Olympic Dam.................................. 12.8 -- -- 12.8 46.1 -- 2.1 -- -- 61.0 15.0 76.0
Queensland Coal /(3)/........................ 899.8 -- -- 899.8 699.4 -- 5.2 -- -- 1,604.5 74.3 1,678.8
Western Australia Iron Ore................... 2,060.9 -- -- 2,060.9 1,067.4 -- 7.4 -- -- 3,135.6 87.4 3,223.1
Minerals Americas............................ 1,068.8 63.0 -- 1,131.8 -- -- 24.6 0.5 -- 1,156.9 27.0 1,183.9
Escondida.................................... 739.2 63.0 -- 802.3 -- -- 9.1 -- -- 811.4 8.9 820.3
Exploration - Minerals Americas.............. 3.1 -- -- 3.1 -- -- 5.1 -- -- 8.2 0.7 8.8
Head Office - BHP Billiton Brasil Ltda....... 51.5 -- -- 51.5 -- -- -- -- -- 51.6 10.9 62.5
Head Office - RAL Cayman Inc................. 32.4 -- -- 32.4 -- -- -- -- -- 32.4 -- 32.4
Pampa Norte.................................. 242.5 -- -- 242.5 -- -- 1.8 -- -- 244.3 2.3 246.6
Potash....................................... -- -- -- -- -- -- 8.6 0.5 -- 9.0 4.2 13.3
Group & Unallocated.......................... (172.8) -- -- (172.8) -- -- -- -- -- (172.8) 12.2 (160.6)
Corporate.................................... (175.5) -- -- (175.5) -- -- -- -- -- (175.5) 12.2 (163.3)
Marketing.................................... 2.7 -- -- 2.7 -- -- -- -- -- 2.7 -- 2.7
Discontinued Operations...................... (35.3) -- 86.3 51.0 43.1 -- 7.2 -- -- 101.3 19.4 120.8
North America Shale (Fayetteville)........... -- -- 6.6 6.6 0.4 -- -- -- -- 7.0 2.9 9.9
North America Shale (Haynesville)............ (35.3) -- 79.5 44.2 42.7 -- 7.0 -- -- 93.9 13.2 107.1
North America Shale (Permian Basin, Eagle
Ford)...................................... -- -- 0.2 0.2 -- -- 0.2 -- -- 0.4 3.3 3.7
Figures are rounded to the nearest decimal point.
(1) Production entitlements of 1.9 million boe paid in-kind.
(2) Production entitlements of 2.6 million boe paid in-kind.
(3) Royalties, fees and other payments made by BHP Billiton Mitsubishi Alliance
Coal Operations Pty Ltd have been included in total payments to the extent
of BHP's ownership of the operating entity, being 50 per cent.
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BHP Billiton Plc - 7
Economic Contribution Report 2018
Basis of report preparation
---------------------------
We have prepared the Report in accordance with the UK Regulations.
Taxes, royalties and other payments to governments are presented in the Report
on a cash paid and cash received basis for the year ended 30 June 2018.
This Report includes all such amounts paid and received by BHP in respect of
each of our operations, including the Onshore US assets, whose sale by BHP was
announced on 27 July 2018. For our controlled assets, amounts included in our
total payments to governments are 100 per cent of the assets' payments to
governments. For our non-operated and operated joint ventures, amounts included
in our payments to governments are 100 per cent of the amounts paid by BHP and,
in the case of BHP Billiton Mitsubishi Alliance (BMA), 50 per cent of payments
made by the operating entity for BMA in which BHP has a 50 per cent ownership.
For our investments in joint ventures and associates that are equity accounted
by BHP, no amounts have been included in our total payments to governments as
BHP is not the operator and does not make payments on behalf of the operation.
For information purposes, 100 per cent of the payments made by our significant
equity accounted investments have been shown on page 4 even though no amounts
have been included in our total payments to governments.
Taxes, royalties and other payments, both cash and in-kind (non-cash), to
governments, net of refunds, are collectively referred to in this Report as
'Total payments to governments' and include the following payment categories:
Corporate income taxes
Payments to governments based on taxable profits under legislated income tax
rules. This also includes payments made to revenue authorities in respect of
disputed claims and withholding taxes on dividends and royalties.
Royalty-related income taxes
Payments to governments in relation to profits from the extraction of natural
resources, including Petroleum Resource Rent Tax (PRRT) in Australia and
Specific Tax on Mining Activities (STMA) in Chile. Royalty-related income taxes
are presented as income tax in section 5.1.1 Consolidated Income Statement in
the Annual Report 2018.
Taxes levied on production
Payments to governments in relation to crude excise, carbon tax and severance
tax on the extraction of natural resources. Taxes levied on production are
presented as expenses, not income tax, in section 5.1.1 Consolidated Income
Statement in the Annual Report 2018.
Royalties
Payments to governments in relation to revenue or production generated under
licence agreements. This also includes payments to revenue authorities in
respect of disputed claims. Royalties are presented as expenses, not income
tax, in section 5.1.1 Consolidated Income Statement in the Annual Report 2018.
Royalty-related income taxes are excluded from Royalties.
Production entitlements
Payments to governments entitled to a share of production under production
sharing agreements. Production entitlements are most often paid in-kind.
In-kind payments are measured based on the market value of the commodity on the
date of delivery to the government.
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Fees
Payments to governments in the form of fees typically levied on the initial or
ongoing right to use a geographical area for exploration, development and/or
production. Includes licence fees, rental fees, entry fees and other payments
for licences and/or concessions.
Payments for infrastructure improvements
Payments to governments for the construction of public infrastructure such as
roads, bridges and port facilities.
Dividend payments
Payments to governments with ownership interests in specific assets; not
payments to governments as holders of ordinary shares in BHP. There were no
dividend payments to governments for the year ended 30 June 2018.
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 2018.
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 (Pounds)86,000
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 the Report) present payments by entity
when not specifically attributable to a project.
Payments in relation to Corporate Head Office and Marketing Offices 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 Marketing Offices comprise functional support for the
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BHP Billiton Plc - 9
Economic Contribution Report 2018
Group that in FY2017 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 results is presented in this Report
as Discontinued operations (refer to Section 5 in the Annual Report 2018 for
further 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. See 'Glossary' 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
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 before taxation, royalties and exceptional items.
BHP or the Group
BHP Billiton Limited and BHP Billiton Plc and their respective subsidiaries.
Current tax expense
The amount of corporate income tax and royalty-related income tax and
production entitlements for our Continuing operations 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 for our Continuing operations attributable to the
current year but payable in future years provided using the balance sheet
liability method.
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10
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 2017 to April 2018 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 for our Continuing
operations.
Low-tax jurisdictions
In classifying which countries are 'low-tax jurisdictions', we have applied the
list issued in December 2017 by the European Union titled 'The EU list of
non-cooperative jurisdictions for tax purposes', subsequently updated as at
30 June 2018.
Payments to shareholders, lenders and investors
Geographical distribution is based on the registered address of shareholders
(for 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 2017 to
30 June 2018.
Social investment
Includes community contributions and associated administrative costs (including
costs borne by BHP to facilitate the operation of the BHP Billiton Foundation),
and BHP's equity share in community contributions for both operated and
non-operated joint ventures.
UK Regulations
The Reports to 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.
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BHP Billiton Plc - 11
Economic Contribution Report 2018
BHP Billiton 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
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Date: 18/09/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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