Page 11 - BHP Economic Contribution Report 2020

Approach to transparency and tax

Our tax principles Our contribution
Our Charter and Our Code of Conduct (Our Code) define Our approach to tax is underpinned by Our Charter and
how we work at BHP. Our Charter describes our purpose and Our Code, and is embodied in our global tax principles.
values and how we measure our success. It is the single most The Risk and Audit Committee of the BHP Board endorsed
important means by which we communicate who we are, these principles and in FY2020, we conducted assurance
what we do and what we stand for, and is the basis for our that we have adhered to our tax principles.
decision-making. Supporting Our Charter is Our Code, which The six principles set out below govern our global approach
helps guide our daily work. It demonstrates how we practically to tax: Our approach
apply the commitments and values set out in Our Charter.

1 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
Transparency to understand the contribution we make and have a greater ability to assess the integrity of the tax Our payments
systems in the countries in which we operate.

2 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 positions, we engage
Corporate with revenue authorities on a real-time basis regarding the application of the tax law and to identify
citizenship and resolve any disagreements on a timely basis. Additional information

3 We are committed to strong governance. We seek to identify, assess, control and report tax risks in

Risk management accordance with our global Risk Framework. Risks identified as material are reported to the Risk and
and governance Audit Committee. Further information is provided on the following page.

4 Our transactions have proper commercial purposes and economic rationale. We locate business

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
rationale in aggressive tax planning.

5 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
Compliance 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 We support simple, stable 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
Advocating of international tax rules (including transfer pricing) and local tax rules in the jurisdictions in which we
reform 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.

BHP Economic Contribution Report 2020 9