BHP Billiton admits no tax paid for Singapore marketing unit

BHP Billiton confirmed on Wednesday it paid no tax on its global marketing base in Singapore but said it was not the only reason for using the island state as a commodities trading hub and that it paid a fair share of tax worldwide.

Australia's tax office is investigating the mining firm and rival Rio Tinto for shifting billions of dollars in iron ore profits through marketing hubs in Singapore.

"[Singapore] has a very attractive tax rate. We're not ashamed of that. Obviously we would like to minimise the amount of tax that we pay, so it is part of the attraction of Singapore," BHP chief financial officer Peter Beaven said.

But he said it was not the only attraction of Singapore and cited its proximity to the majority of BHP's customers as well as its good logistics as reasons behind choosing the location.

When asked if the company paid zero tax on its Singapore marketing operations, Beaven said: "That's correct."

Beaven said there was a small mark-up on commodities produced globally and sold into Singapore, but this reflected an "appropriate value add" by its marketing team that helped to get the best deal for producers and boosted the value of commodities like iron ore taxed in Australia. Less than 1 per cent of the profit generated from Australia was not taxed in Australia.