By Prashant Mehra
SYDNEY, Sept 23 AAP - BHP Billiton paid $US7.3 billion ($A10.30 billion) to governments around the world during the last financial year while its chief executive took a pay cut.
The world's top miner, which has come under fire over its use of a marketing hub in Singapore, disclosed in a report how much it paid in taxes, royalties and other payments to governments in the countries it operates in during 2014/15.
Nearly $US5.2 billion was paid in Australia alone.
BHP said its global adjusted effective tax rate was 31.8 per cent, well above the OECD average corporate rate of 25 per cent.
The resources giant, along with other multinationals including rival Rio Tinto, Apple and Google has been under investigation by the Australian Taxation Office over the use of Singapore marketing hubs to allegedly reduce their tax bills.
While BHP is subject to an average tax rate of 33.5 per cent in Australia, it pays zero tax on its marketing operations in Singapore.
Chief financial officer Peter Beaven defended the use of a Singapore marketing hub to minimise BHP's tax, saying the company continues to pay its fair share of taxes and had fully explained its reasons for the operations.
"We are in Singapore because it's the most appropriate place to undertake that part of the value chain," he told reporters on Wednesday.
"Additionally, it also has a very attractive tax rate."
Most of the miner's Australian profits continue to be taxed here, he said.
BHP in August reported an 86 per cent slide in 2014/15 net profit to $US1.9 billion amid falling iron ore, copper, coal and petroleum prices. Its shares have fallen by nearly a quarter in the past 12 months.
The miner plans to cut capital and exploration expenditure by $US2.5 billion this financial year to $US8.5 billion, amid a global commodities slump.
The move has been prompted by falls in global prices of commodities and crude oil amid concerns about a supply glut and falling demand in China's troubled economy.
The underperformance also forced BHP's chief executive Andrew Mackenzie to take a more than 40 per cent pay cut.
It's annual report showed he earned $US4.58 million ($A6.46 million) in 2014/2015, down from nearly $US8 million in 2014.
While his salary was held steady at $US1.7 million for the year, his short- and long-term incentive payments fell sharply.
Mr Mackenzie's short-term incentives were affected mainly on account of five deaths at BHP's operations during the year.
He also did not receive any long-term incentives because of weaker shareholder returns compared to peer companies.
Salaries and packages for the chief executive and group management committee members, which have been frozen since 2013, would not change in 2015/16, BHP said.
The company will, however, reduce fees paid to its chairman by 13 per cent and non-executive directors by an average of 12 per cent from this year, after an annual benchmarking review.
