The Singapore trading hubs of the world's largest commodity companies are coming under scrutiny from the governments of some resource-producing countries who say they suspect they are using units in the Southeast Asian financial centre to avoid tax.
Some of the world's largest oil, mining and soft commodity companies book billions of dollars of revenue in the tiny island state every year, where tax rates can be very low, which is perfectly legal unless they deliberately underprice group transactions so as to shift profit there from units in other countries.
The companies deny any improper transfer pricing and say they are in Singapore to be closer to Asian clients, to local expertise and trade routes, as the region accounts for a growing share of their business.
The world's two largest miners, BHP Billiton and Rio Tinto, between them booked close to $50 billion in revenue in Singapore in 2013, according to documents from the country's corporate registry, and posted a combined net profit of more than $2 billion.
They mostly conduct trading operations there, a high-volume, low-margin business that involves buying up commodities from their global operations and selling them on to clients. They also look after logistics and risk management.
The companies say their Singaporean operations were not set up to cut tax but to serve their clients better.
Australia and Indonesia's tax authorities say they are investigating whether arrangements like these simply shift profits away from where the commodities are extracted. Most jurisdictions require such arrangements to have a commercial purpose beyond saving tax, and the group transactions should be conducted at arms-length pricing. Australia and Indonesia both rely heavily on mining exports and count global miners among their biggest taxpayers.