ATO wait in Chevron avoidance court fight

The Australian Tax Office will have to wait a fortnight to fight US oil giant Chevron in court over claims the company has avoided millions in tax by shifting profits offshore.

The Australian Tax Office will have to wait a fortnight to fight US oil giant Chevron in court over claims the company has avoided millions in tax by shifting profits offshore.

A Federal Court hearing scheduled for Monday has been vacated, with a directions hearing now due on October 16.

The court case comes as the Tax Office tightens the net around multinational companies using aggressive tax strategies to move profit overseas.

The ATO's claims go back to 2003 and relate to inter-party loans between Chevron Australia and its US parent company, Chevron Corporation, following a restructure of the company when it merged with Texaco in 2003.

The loans went through an intermediary company called Chevron Funding Corporation, based in the US state of Delaware.

In an appeal statement last year, Chevron argued it had dealt at "arm's length" with the subsidiary, which handled $US2.5 million in loans from the US parent company to Chevron Australia. Chevron Australia repaid the loans with interest totalling $US1.5 billion between 2003 and 2007.

The case is expected to be the first big court battle between the Tax Office and a foreign multinational over transfer pricing rules, which relate to the prices charged in trade between different parts of a global business.

It is an area where the Tax Office has suffered big legal defeats in the past, prompting a tightening of the laws last year, which Chevron and other companies fiercely opposed.

The Tax Office has stepped up its offensive on corporate tax dodging, with a record number of audits of large or multinational businesses suspected of shifting profits overseas planned for this financial year.

Tax Commissioner Chris Jordan has said aggressive tax strategies such as those used by Google and Apple would be examined during his term.

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