US energy giant Chevron is now facing one of the largest tax bills in Australian history after it lost its appeal against the Australian Tax Office (ATO).
In a unanimous decision, three Federal Court judges dismissed the appeal, which was originally launched in December last year.
The decision involves Chevron underpaying tax in the years from 2004 to 2008.
They did this by borrowing money having taking out a high interest loan from a subsidiary while also have the same subsidiary taking out a low interest loan from them.
This would mean that the subsidiary, which in this instance was based in the US, made huge profits, which weren’t taxed in Australia.
Chevron will now have to pay around $300 million in unpaid tax, as well as the ATO’s legal fees.
Former Treasurer Wayne Swan has praised the ruling on Twitter, saying that the ruling should give make other tax evaders settle with the ATO.
Treasurer Scott Morrison has also expressed his approval at the ruling on Twitter, claiming the governments tax avoidance programs are responsible.
“ATO’s Chevron victory is one for the good guys – tax evaders like BHP and Rio should now settle with ATO” he said.
A spokesperson for Chevron has said that the company has paid a large amount of tax in Australia.
“Since 2009, we’ve paid almost $4 billion in federal and state taxes and royalties” he said.
Chevron hasn’t ruled out going to the high court to appeal the decision saying they will look at all their options.
“We will review the decision to determine next steps, which may include an appeal to the High Court of Australia” the spokesman said.
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