The mining giant said in a statement that the new tax will result in an increase in the total effective tax rate on its profits earned from its Australian operations to around 57 per cent from 2013 from the current rate of 43 per cent.
I read the new tax was deductible from normal taxes. So at 30% tax rate that would knock 40% down to 28%. But that is still a long way from the 14% BHP increased. I did read that state royalties could be deducted. Could this explain the other roughly 14%???
This is election year politics in Australia. Do not expect the bill to hold in its present form. The nonresource side of the economy consists of Aussie pension funds that derive great benefit from the growth in BHP and RIO stock. There will be a more gradual approach over a longer period of time once the nonresource part of the economy realizes that lower tax rates come with a big hit to their retirement portfolios.
BHP may have this covered in advance by getting the 90% price increase for iron ore and coal.
Australian states' rights are stronger than in USA.
Some of the new 40% tax could be offset by deduction, offset (or reduction) of duplicative state taxes. See note at the end of the news release.
This is still a negotiation. I doubt you will see a full 40% tax, if any.