Page 29 - BHP Economic Contribution Report 2020

Glossary

Adjusted effective tax rate Income tax expense Our contribution
Total taxation expense excluding exceptional items and exchange The total of current tax expense and deferred tax expense.
movements included in taxation expense divided by Profit before
taxation and exceptional items. Low-tax jurisdictions
In classifying which countries are ‘low-tax jurisdictions’, we have applied
Adjusted effective tax and royalty rate the EU list of non-cooperative jurisdictions for tax purposes, issued
Total taxation expense excluding exceptional items and exchange in December 2017 by the European Union and subsequently updated.
movements included in taxation expense plus royalty expense The updated list used in this Report was issued on 28 February 2020.
divided by Profit before taxation, royalties and exceptional items. Our approach
Payments to shareholders, lenders and investors
BHP or the Group Geographical distribution is based on the registered address
BHP Group Limited and BHP Group Plc and their respective subsidiaries. of shareholders (for returns to shareholders including dividends)
and country of incorporation of the borrower for interest payments.
Current tax expense
The amount of corporate income tax and royalty-related income Profit before taxation
tax and production entitlements currently payable and attributable Profit before taxation when presented by country is adjusted
to the year, measured at rates enacted or substantively enacted for intercompany dividends.
at year-end, together with any adjustment to those taxes payable
in respect of previous years. Project
Consistent with the UK Regulations, a project is defined as the
Deferred tax expense operational activities that are governed by a single contract, licence, Our payments
The amount of corporate income tax and royalty-related income tax and lease, concession or similar legal agreements and form the basis for
production entitlements attributable to the current year but payable payment liabilities with a government. If multiple such agreements are
in future years provided using the balance sheet liability method. ‘substantially interconnected’ they may be considered a project. For
these purposes ‘substantially interconnected’ means forming a set of
Employees and contractors operationally and geographically integrated contracts, licences, leases
The weighted average number of employees and contractors across or concessions or related agreements with substantially similar terms
the Group is calculated from the actual number of employees on the that are signed with a government, giving rise to payment liabilities.
last day of the month over the 10-month period from July 2019 to
April 2020 at each BHP controlled site. It includes the Executive Director, Report
100 per cent of employees of subsidiary companies and our share The Report has been prepared for BHP’s financial year from 1 July 2019
of proportionate consolidated entities. Employees of equity accounted to 30 June 2020.
entities are not included. Part-time employees are included on a Additional information
full-time equivalent basis. Employees of businesses acquired or Social investment
disposed of during the year are included for the period of ownership. Includes community contributions and associated administrative
costs (including costs borne by BHP to facilitate the operation of the
Government BHP Foundation), and BHP’s equity share in community contributions
Any national, regional or local authority of a country (includes a for both operated and non-operated joint ventures.
department, agency or undertaking that is a subsidiary undertaking
where the authority is the parent undertaking). UK Regulations
The Reports on Payments to Governments Regulations 2014, as
amended by the Reports on Payments to Governments (Amendment)
Regulations 2015. The UK Regulations implement the EU Accounting
Directive (Chapter 10, Directive 2013/34/EU) in the United Kingdom.

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