21 April 2017
Media Release - #2017034, 2017

Government welcomes Federal Court’s decision in Chevron case

Joint media release with
the Hon Kelly O'Dwyer MP
Minister for Revenue and Financial Services

The Turnbull Government today welcomed the Full Federal Court’s decision confirming the Australian Taxation Office’s assessment of $340 million in taxes and penalties owed by Chevron. The assessment followed the ATO’s decision to disallow deductions claimed by Chevron for interest payments made to related offshore parties in respect of a multi-billion dollar loan.

It is a first priority of the Turnbull Government to ensure Australia has some of the toughest rules in the world dealing with cross-border transactions and ensuring that Australia gets the right amount of tax on profits made in Australia.

The Turnbull Government is determined to ensure multinationals do the right thing and pay their fair share of tax here in Australia so that the Government can continue to fund vital infrastructure and services.

This case is an example of why the Government has provided additional funding to the ATO to enable the tax office to take the fight to major taxpayers and challenge aggressive tax structures in place. The case shows the Tax Commissioner is using all available powers and resources to ensure the law is tested and upheld and the integrity of the tax system is maintained. The new Tax Avoidance Taskforce established by the Turnbull Government and provided with $679 million in funding has strengthened the ATO’s capacity to identify, challenge and crack down on tax avoidance by multinationals.

This decision together with recently implemented measures such as the Diverted Profits Tax that is expected to raise $100 million in revenue a year from 2018-19, the Multinational Anti-Avoidance Law that has helped claw back $2 billion in tax this financial year, increased penalties and updated transfer pricing rules sends a clear message to multinationals that they need to pay the right amount of tax on profits earned here.

The Turnbull Government will continue to take strong action to ensure the integrity of the Australian tax system.