An appeal against a multimillion dollar tax bill owed by multinational oil giant Chevron is taking place, and will have global implications for the way tax paid by large companies is assessed.
Chevron recently lost a landmark profit-shifting case in the Federal Court that left it with a tax bill of about $300 million.
More National News Videos
- Video duration
- 01:56
Company tax cuts: where to now?
Company tax cuts: where to now?
Reducing company tax has become a political tug-of-war - here's how the government and Labor arrived at their positions.
Up Next
Half-tonne of drugs seized in bust
- Video duration
- 01:18
- Video duration
- 01:18
Half-tonne of drugs seized in bust
Half-tonne of drugs seized in bust
Federal Police joined forces with Australian Border force to seize more than half a tonne of methamphetamines, smuggled in protein powder containers shipped from the united states.
Up Next
Sage Institute students' tearful realisation
- Video duration
- 00:46
- Video duration
- 00:46
Sage Institute students' tearful ...
Sage Institute students' tearful realisation
Melbourne classes have been suspended, and colleges in Brisbane and Sydney shut down after administrators failed to find a buyer.
Up Next
Hanson facing discrimination lawsuit
- Video duration
- 01:52
- Video duration
- 01:52
Hanson facing discrimination lawsuit
Hanson facing discrimination lawsuit
Two axed One Nation officials intend to take legal action against Pauline Hanson for alleged age discrimination.
Up Next
Eight charged over $324 million meth haul
- Video duration
- 00:31
- Video duration
- 00:31
Eight charged over $324 million meth haul
Eight charged over $324 million meth haul
Vision shows the arrest of some of a group of eight people over a 540-kilogram methamphetamine shipment following a sting operation in western Sydney. Vision: AFP.
Up Next
Victorian housing ideas draw unlikely support
- Video duration
- 00:51
- Video duration
- 00:51
Victorian housing ideas draw unlikely ...
Victorian housing ideas draw unlikely support
Cartoonist Matt Davidson looks at some rare agreement between Victoria's Labor Premier and federal Liberals over housing affordability.
Up Next
'Feminism is important to me because...'
- Video duration
- 02:38
- Video duration
- 02:38
'Feminism is important to me because...'
'Feminism is important to me because...'
Students of Sydney Boys High School present a video as part of a week-long campaign at the school to examine gender equality and how feminism affects both men and women. Produced by Ronald Luo.
Up Next
Bank's long list of breaches
- Video duration
- 02:23
- Video duration
- 02:23
Bank's long list of breaches
Bank's long list of breaches
Westpac's CEO Brian Hartzer responds to questions about the number of ACIS investigations into the bank.
Company tax cuts: where to now?
Reducing company tax has become a political tug-of-war - here's how the government and Labor arrived at their positions.
Monday marked the first day of hearings of Chevron's appeal to the Full Federal Court.
The ATO has been fiercely battling Chevron in court over unpaid taxes between 2004 and 2008.
In October the ATO won its case, arguing Chevron used a series of loans and related-party payments worth billions of dollars to slash its tax bill by about $300 million.
The decision was a big win for the ATO, which has spent about $10 million on legal costs to date.
The tax and business community are closely watching what happens with Chevron's appeal.
"This court case is of major significance in Australia and internationally," said International Transport Workers Federation senior researcher Jason Ward. The union, which represents workers on the offshore LNG projects of WA, has been a vocal critic of Chevron.
"Chevron has been using related party loans - sending profits to low-tax jurisdictions such as Delaware - to reduce the tax that they pay in Australia," Mr Ward said.
He said people around the world were also watching this case closely as it would impact what other multinationals are doing in low-tax jurisdictions.
The case is unravelling as the ATO has another audit underway relating to a $35 billion loan that Chevron has used in relation to the Gorgon gas project.
"The implications on the current loan, not subject to this case, are huge," Mr Ward said. "Upwards of $15 billion in tax revenue in Australia by Chevron's own admission."
The long-running Senate inquiry into corporate tax avoidance will resume hearings this year, with a special focus on oil and gas companies. The inquiry has broadened the scope of the hearings to include the complex structures that such companies use.
At earlier hearings held in November 2015, Tax Commissioner Chris Jordan and one of his lieutenants told the inquiry that multinational oil and gas companies were a particularly high-risk category and that the use of so-called marketing hubs, which allow sales and profits of Australian resources to be booked overseas, were an "emerging concern" for the ATO.
Chevron is one of several multinationals facing a showdown with the tax man. The ATO in December confirmed that apart from Chevron, Crown and BHP Billiton are among seven large companies that have been hit with tax bills amounting to $2 billion.
But that revenue could take time to flow through, if at all. While in recent years most companies have opted to settle with the ATO, the agency is expecting some other companies will head to court.
0 comments
New User? Sign up