UPDATE 2-Miner BHP to pay $390 mln in Australian tax dispute over Singapore hub

* As part of deal, BHP to pay about $390 mln in additional taxes

* BHP Singapore hub was focus of long fight with Aus tax authority

* Tax office says landmark deal sends strong message to others (Adds comment from investor, analyst, tax authority)

By Melanie Burton

MELBOURNE, Nov 19 (Reuters) - BHP on Monday said it had signed an agreement with Australia's tax authorities to settle a long-running dispute over the global miner's operations in Singapore.

As part of the deal, the world's largest miner is paying a total of about A$529 million ($386.43 million) in additional taxes on income for 2003 to 2018, BHP said in a statement, adding that it had already paid A$328 million of that.

The settlement removes a thorn from the side of BHP which alongside fellow miner Rio Tinto was accused of not paying its fair share of tax as governments cracked down on multinationals in the wake of the global financial crisis. Both companies denied the accusations.

Tax authorities had been in dispute with both firms over the amount of Australian tax payable from sales of Australian commodities to their Singapore marketing businesses.

"It's good to resolve, no admission of liability but small in the overall scheme for BHP," said Rohan Walsh, a Melbourne-based investment manager for Karara Capital.

BHP had threatened court action after the Australian government earlier demanded it pay $767 million in back taxes and penalties.

"This is an important agreement and we are pleased to resolve this longstanding matter," BHP CFO Peter Beaven said.

Additionally, BHP will raise its stake in BHP Billiton Marketing AG, which is the main company conducting the miner's Singapore marketing business, to 100 percent from 58 percent.

The change in ownership will make all profits made in Singapore from Australian assets owned by BHP fully subject to Australian tax, the miner added. "This is a landmark and precedential development in the execution of our marketing hubs strategy, and sends a strong signal to other industry participants," the Australian Tax Office (ATO) said in a statement. "Given the importance of mining and natural resources to the Australian economy, it is critical that exporters of Australian commodities, whether iron ore, coal, gas or other commodities, pay the correct tax in Australia on their profits."

A spokesman for Rio Tinto said that its discussions with the ATO were ongoing and otherwise declined to comment.

"(The deal) fully resolves the longstanding dispute ... with no admission of tax avoidance by BHP, and provides certainty in relation to the future taxation treatment," BHP said.

( = 1.3689 Australian dollars) (Reporting by Melanie Burton and Sonali Paul in Melbourne and ditya Soni in Bengaluru; Editing by Christian Schmollinger and Joseph Radford)