Our approach to transparency and tax

We are proud to be a corporate leader in transparency and have continually updated and expanded our level of disclosure over the 20 years we have been disclosing details of our tax and royalty payments.

Our approach to tax is underpinned by Our Charter and our Code of Business Conduct, and is embodied in our global tax principles.



Our commitment to transparency

BHP has a long-standing commitment to transparency. We believe it enhances understanding, builds trust and holds us and others to account.

BHP’s corporate 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 FY2020 was US$37.2 billion. This includes payments to suppliers, wages and benefits for our more than 80,000 employees and contractors, dividends, taxes and royalties, and voluntary investment in social projects across the communities where we operate.

In FY2020, our tax, royalty and other payments to governments totalled US$9.1 billion. Of this, 82.2 per cent or US$7.5 billion was paid in Australia. During the last decade, we paid US$85.0 billion globally in taxes, royalties and other payments, including US$64.2 billion (approximately A$76.0 billion) in Australia.

FY2020 total economic contribution

We are proud of the valuable contribution we make to the communities where we operate and to society as a whole. Our total economic contribution includes payments to suppliers, wages and employee benefits, dividends and other payments to shareholders, taxes and royalties, and voluntary social investment in communities where we operate.
US$37.2bnOur total economic contribution in FY2020 was US$37.2 billion.
US$9.1bnWe paid US$9.1 billion is global taxes, royalties and other payments to governments.
33.2%Our global adjusted effective tax rate was 33.2%, and 42.2% when royalties are included.
31.7%Our Australia adjusted effective tax rate was 31.7%, or 42.4% including royalties.
US$7.5bnWe paid US$7.5bn in Australian taxes, royalties and other payments to governments.
US$22.4bnOur total economic contribution in Australia this year was US$22.4 billion.
  • Our tax principles
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Our tax principles


Our Charter and Our Code of Conduct (Our Code) define how we work at BHP. Our Charter describes our purpose and values and how we measure our success. It is the single most important means by which we communicate who we are, what we do and what we stand for, and is the basis for our decision-making. Supporting Our Charter is Our Code, which helps guide our daily work. It demonstrates how we practically apply the commitments and values set out in Our Charter.

Our approach to tax is underpinned by Our Charter and Our Code and is embodied in our global tax principles. The Risk and Audit Committee of the BHP Board endorsed these principles and in FY2020, we conducted assurance that we have adhered to our tax principles. The six principles set out below govern our global approach to tax:

1. Transparency

We are transparent about the taxes and royalties that we pay to governments because we believe that openness allows our shareholders, employees, contractors, partners, customers and communities to understand the contribution we make and have a greater ability to assess the integrity of the tax systems in the countries in which we operate.

2. Corporate citizenship

We act with integrity when engaging with revenue authorities to support positive and sustainable relationships. Where possible, for the purposes of obtaining certainty of our tax position, we engage with revenue authorities on a real-time basis regarding the application of the tax law and to identify and resolve any disagreements on a timely basis.

3. Risk management and governance

We are committed to strong governance. We seek to identify, assess, control and report tax risks in accordance with our global Risk Framework. Risks identified as material are reported to the Risk and Audit Committee.

4. Business rationale

Our transactions have proper commercial purposes and economic rationale. We locate business activities where value is optimally created. We seek to have a tax charge that contributes to superior business performance and delivers long-term shareholder value. Accordingly, we do not engage in aggressive tax planning.

5. Compliance

We respect and comply with the laws of the jurisdictions in which we operate. We meet all of our tax compliance obligations on time, Our tax obligations include pricing transactions in our global value chain according to where value is created, and economic activity occurs, in compliance with the Organisation for Economic Co-operation and Development (OECD) guidelines, and based on the arm's length principle.

6. Advocating reform

We support simple and competitive tax rules and the principle that the taxing rights of countries should be commensurate with where the economic activity occurs. We engage in the reform process of international tax rules (including transfer pricing) and local tax rules in the jurisdictions in which we operate. We do this because we believe that tax systems should be effective, efficient and competitive, in order to support economic growth, job creation and long-term sustainable tax contributions.


Our contribution throughout the value chain


BHP’s purpose is to bring people and resources together to build a better world.

We generate considerable value – both financial and social – to the communities in the countries where we operate and to society more broadly. We do this at each step in our value chain.



How we contribute


Evaluation and exploration

We invest in discovering new resources, to meet the needs or future generations. 

  • Payments to suppliers
  • Wages paid to employees
  • Permits, licence fees and employment taxes
  • No royalties or corporate tax

Evaluation and exploration work is largely about creating the potential for future value. Payments to governments during the exploration phase are usually relatively low, reflecting the high levels of investment and risk of this work. Permits, licence fees and employment taxes make up the majority of payments to governments. Contributions to the community include payments to suppliers and contractors for any construction or excavation, and wages to employees (often for highly skilled and specialist roles, such as geologists, metallurgists and environmental scientists).


We invest in studies, trials and infrastructure with the goal of creating the maximum value from resources. 

  • Capital expenditure
  • Payments to suppliers and contractors
  • Wages paid to employees
  • Employment and sales taxes, import duties
  • No royalties or corporate tax
  • Contributions to communities in which we operate

Development involves construction of facilities, excavation and any supporting infrastructure that is required. This can extend to construction of whole towns, including schools, medical facilities and recreation areas. More jobs are created, both directly in construction and more broadly through the provision of goods and services to the site and workforce. Contributions to local communities begin to be made. Payments to governments are largely in the form of indirect taxes (such as goods and services taxes or excise fees) on equipment and materials, and employment taxes.

Extraction and processing

We extract and process commodities, safely and sustainably. 

  • Net profits – corporate taxes paid
  • Royalties paid from extraction
  • Payments to suppliers and contractors
  • Wages paid to employees
  • Employment and sales taxes, import dutiesContributions to communities in which we operate

Once extraction begins, royalties and resource taxes begin to be paid. Employment taxes increase as the operating workforce commences. Corporate income tax may also begin to be paid; however, this is often lower in the early years of an operation as tax losses from the construction phase are offset against income. Over the life of the operation, payments to governments will be significant and can often equal as much as 50 per cent of profit. Community contributions continue through the operating life. Payments to shareholders, lenders and investors also increase as income from operations is generated. As we invest in long-term assets, we also create high-value, long-term job opportunities and build strong relationships with communities, suppliers and contractors.

Rehabilitation and closure

We close our operations through one or a combination of rehabilitation, ongoing management or - in consultation with the community - a transition to an alternative use. 

  • Payments to suppliers and contractors
  • Corporate taxes paid if alternative revenue streams from post-mining land use are found
  • Lower employment and sales taxes
  • Low or no royalties

Land no longer required for operations is rehabilitated. Rehabilitation activities are often interwoven with the continuing development of nearby operations. Payments to governments will be lower, as will employment and payments to suppliers and contractors, but post-mining land uses may generate new revenue streams for BHP and the local community.

Commercial function

We sell our products, procure suppliers, organise freight and manage market risks to maximise value. 

  • Payments to suppliers and contractors
  • Wages paid to employees
  • Corporate, employment and sales taxes, import duties

Sales and Marketing and Procurement are separate core businesses of BHP, connected under the Commercial function. They are the link between BHP’s global operations, our customers and our local and global suppliers, and are aligned to our assets. We sell and transport our products and obtain the goods and services that flow into our supply chain. Contributions include payments to suppliers, with a significant amount of spending directed to businesses in the communities in which we operate. We also employ more than 2,300 people in our Commercial function globally. The contribution of our other businesses is enhanced by the activities of our Commercial function. Sales and Marketing maximise the prices received for the sale of our products and Procurement ensures our unit costs are competitive, maintaining the sustainability of our operations.


Sustainability Report 2020

Sustainability is a core value at BHP and to reflect its importance, we have refreshed our sustainability reporting in FY2020.

Climate Change Report 2020

The resources we produce are essential, now and for the future. And the world will need even more of many of them to transition to renewable energy and support global economic growth. 

Economic Contribution Report 2020

Download and read our 2020 Economic Contribution Report.