Finance, Government - Chevron Loses Tax Appeal
The Federal Court has rejected US-based multinational gas and oil company Chevron's appeal and ordered it to pay AU$300 Million in back taxes.
Chevron could appeal the ruling to the High Court, but as it stands right now Chevron will also have to pay substantial costs. That would include those racked up by the Australian Tax Office (ATO) in pursuit of the chase - another $10 Million.
The Australian Tax Office (ATO) had been pursuing Chevron for unpaid taxes between 2004 and 2008 - specifically, the tax deductibility of a high interest, $2.5 Billion loan from a Chevron subsidiary in the US state of Delaware to Chevron Australia. The Full Federal Court agreed with the ATO that Chevron used the loan and related-party payments worth billions of dollars to reduce its tax bill by more than $300 million.
The ATO has been paying increased attention to these sorts of profit-hiding arrangements, and some see this as setting precedent for actions against other companies.
"The ATO's win against Chevron should send a strong signal to all multinationals that these blatant tax avoidance schemes will be challenged," said International Transport Workers Federation senior researcher Jason Ward. "With this judgment, Chevron should be forced to change the current $42 billion loan which is already being audited by the ATO. If the current larger scheme is not restructured, Australians will lose billions more in future tax revenue."