Chevron drops tax fight

Chevron has withdrawn its appeal to Australia’s High Court over a $340 million tax bill relating to underpaid taxes from its Australian operations.

This results in a landmark court ruling on related-party loans, which could affect other multinational companies and their operations in Australia.

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has reached an agreement with the Australian Taxation Office (ATO) on the loan transfer pricing dispute and have withdrawn our appeal to the High Court,” said a statement from Chevron.

“Chevron believes the agreed terms are a reasonable resolution of the matter.”

Both Chevron and the ATO declined to reveal the size of the settlement.

In April, a Federal Court full bench unanimously rejected Chevron’s appeal against an ATO ruling that it used an intra-company loan to avoid tax on its Australian operations.

“The judgement in Chevron is one of the most important decisions in corporate tax in Australia,” said an ATO spokesperson.

“We have been very clear that this case would have direct implications for a number of cases the ATO is currently pursuing in relation to related party loans, as well as indirect implications for other transfer pricing cases.

“The ATO will not shy away from lengthy or complex cases.

“We have the laws, the powers and the capability to hold these multinational companies to account.”

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