Chevron drops A$340m tax bill appeal

MELBOURNE: Chevron Corp has withdrawn an appeal to Australia’s High Court over a disputed A$340 million (RM1.15 billion) tax bill, leaving in place a landmark court ruling on related-party loans that could affect other multinational companies.

“Chevron Australia has reached agreement with the Australian Taxation Office (ATO) on the loan transfer pricing dispute and have withdrawn our appeal to the High Court,” said Chevron.

With the appeal withdrawn, a Federal Court ruling remains in place, which found the United States oil and gas company had underpaid taxes by setting up a A$2.5 billion inter-company credit facility offshore with an abnormally high interest rate, effectively lowering its taxable income within Australia.

The tax office estimated the court’s decision would result in more than A$10 billion in additional revenue being brought in over the next 10 years related to multinationals’ transfer pricing of relatedparty financing alone, said the government.

“Not only does this result put more revenue back to the Australian people, it also strengthens the ATO’s position in pursuing other arrangements where firms seek to dodge Australia’s transfer pricing rules,” said Revenue and Financial Services Minister Kelly O’Dwyer.

“The judgment in Chevron is one of the most important decisions in corporate tax in Australia,” said an Australian Taxation Office spokesman. Reuters

Not only does this result put more revenue back to the Australian people, it also strengthens the ATO’s position in pursuing other arrangements...

KELLY O’DWYER Revenue & Financial Services minister