SYDNEY – Oil giant Chevron lost an appeal in an Australian court on Friday over an internal loan that is believed to have been used to route profits overseas to evade taxes in the country.
The federal court dismissed Chevron’s appeal against an Australian Taxation Office tax bill that asked the multinational to cough up some $226 million, plus other expenses, reported ABC news.
The case involves an amount of AU$2.5 billion ($1.88 billion) that a Chevron subsidiary based in Delaware – a corporate tax haven in the United States – had lent to Chevron Australia Holdings in 2003.
The ATO believes the interest on this internal loan was too high, allowing Chevron to inflate its deductions, transfer profits abroad and pay less tax in Australia.
The decision might have implications for a similar Chevron loan worth around AU$42 billion.