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Australian Taxation Office wins landmark case against Chevron

"Rachel Maddow Delivers An Epic Takedown Of Trump’s ‘Ridiculous’ Tax Reform Plan "

IMAGE caption - Chevron has lost a crucial tax case against the ATO

The Australian
11:23AM April 21, 2017

Ben Butler
Business reporter
Melbourne

Chevron has lost a crucial appeal against a $250 million tax bill, clearing the way for tax commissioner Chris Jordan to continue his pursuit of the offshore oil and gas industry over its funding arrangements.

Three judges of the Full Court of the Federal Court this morning unanimously dismissed Chevron’s appeal, and ordered the resources multinational to pay the Australian Taxation Office’s costs.

Chevron said it was “disappointed” with the decision. “We will review the decision to determine next steps, which may include an appeal to the High Court of Australia,” a spokesman said.

The case related to a $2.5bn loan from Chevron subsidiary ChevronTexaco Funding Corporation, incorporated in domestic US tax haven Delaware, to the group’s local arm, Chevron Australia Holdings.

Under the terms of the 2003 loan, the Australian company paid interest back to the US at a rate equal to the one-month interbank rate plus a margin of 4.14 per cent.

The ATO successfully argued that the interest rate was too high, and would have been much lower if the money had been borrowed from an unrelated party.

As revealed by The Australian, the ATO is currently investigating Chevron’s funding of its Australian projects, including the $60bn Gorgon joint venture it runs.

In a submission to a Senate inquiry earlier this month, the ATO flagged deep concerns about the billions of dollars a year in interest the local arms of resources multinationals are paying to offshore affiliates as the sector embarks on a $291bn building spree.

It said the sector was largely funded by related-party debt, paying away an estimated $3.9bn in interest to offshore affiliates last year.

http://www.theaustralian.com.au/business/mining-energy/australian-taxation-office-wins-landmark-case-against-chevron/news-story/3f25531943fa9903a9d94b97ceb96568

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Donald Trump's US tax cut plan could put pressure on Australian Government to follow suit
By business reporter Lucia Stein
Posted about an hour ago
http://www.abc.net.au/news/2017-04-27/australia-may-need-to-follow-us-tax-down-amp-economist/8477026

Rachel's take on yet another of Trump's plan which isn't is good to see.