Page 185 - Annual Report 2020

3 Exceptional items continued
Global taxation matters
Global taxation matters includes amounts released from provisions for tax matters and other claims resolved during the period. Strategic Report
30 June 2018
Gross Tax Net
Year ended 30 June 2018 US$M US$M US$M
Exceptional items by category
Samarco dam failure (650) − (650)
US tax reform − (2,320) (2,320)
Total (650) (2,320) (2,970)
Attributable to non-controlling interests − − −
Attributable to BHP shareholders (650) (2,320) (2,970) Governance at BHP

Samarco Mineração S.A. (Samarco) dam failure
The FY2018 exceptional loss of US$650 million related to the Samarco dam failure in November 2015 and comprises the following:
Year ended 30 June 2018 US$M
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to the Samarco dam failure (57)
Loss from equity accounted investments, related impairments and expenses:
Samarco impairment expense (80)
Samarco dam failure provision (429)
Net finance costs (84) Remuneration Report
Total (1) (650)
(1) Refer to note 4 ‘Significant events – Samarco dam failure’ for further information.
US tax reform
On 22 December 2017, the US President signed the Tax Cuts and Jobs Act (the TCJA) into law. The TCJA (effective 1 January 2018) includes
a broad range of tax reforms affecting the Group, including, but not limited to, a reduction in the US corporate tax rate from 35 per cent
to 21 per cent and changes to international tax provisions.
Following enactment of the TCJA, the Group has recognised an exceptional income tax charge of US$2,320 million, primarily relating
to the reduced US corporate income tax rate, which resulted in re-measurement of the Group’s deferred tax position and impairment Directors’ Report
of foreign tax credits due to reduced forecast utilisation, together with tax charges on the deemed repatriation of accumulated earnings
of non-US subsidiaries.
Year ended 30 June 2018 US$M
Re-measurement of deferred taxes as a result of reduced US corporate income tax rate (1,390)
Impairment of foreign tax credits (834)
Net impact of tax charges on deemed repatriation of accumulated earnings of non-US subsidiaries (194)
Recognition of Alternative Minimum Tax Credits 95 5
Other impacts 3
Total (1) (2,320)
(1) Refer to note 6 ‘Income tax expense’ for further information. Financial Statements

Additional information

BHP Annual Report 2020 183 Shareholder information