Chevron court case every company is watching
AUSTRALIAN FINANCIAL REVIEW | Joanna Mather
It's been described as the most significant tax case ever litigated in Australia. The Australian Tax Office is pursuing Chevron over a $US2.5 billion ($3.7 billion) inter-company loan. Immediately at stake is roughly $340 million in taxes, penalties and interest on the 2003 loan.
But that's not the half of it. Since 2003, Chevron has borrowed $43 billion to finance its part of the Gorgon and Wheatstone LNG projects.
If the full bench of the Federal Court finds in favour of the ATO, Chevron may be on the hook for a whole lot more than $340 million.
Not only that, a decision against Chevron will require every multinational company in the country to re-examine its transfer pricing arrangements, particularly as they relate to inter-company loans.