Chevron shifting shows up again
One of Australia’s worst tax avoiders is shuffling around billions to trim its tax bill.
A Chevron shell company in the US tax haven of Delaware has lent a total of $42 billion to Chevron Australia Holdings Pty Ltd; the company behind the giant Gorgon gas project in Australia's northwest.
Chevron says the money moved between the Delaware subsidiary and Australia is a legitimate loan to fund construction the gas project, but it will coincidentally cut Chevron's tax bill in Australia by many billions of dollars.
Interest charges on the $42 billion “credit facility” are around $2.2 billion dollars for the last 12 months, but no debt has been repaid.
Insiders say Chevron is running up the debt in order to offset it and avoid tax on future profits.
“What happens is the primary Australian company is owned by a shell company in Delaware,” said Jason Ward from the union-backed research group ITF.
“It pays $175 in annual filing fees to the State of Delaware and it reduces Chevron's taxes in Australia by [the Australian subsidiary] paying interest payments to the company in Delaware which doesn't get taxed.
“Chevron has admitted that as much as $15 billion could be lost from this current tax scheme, but now that there's an extra $7 billion on that loan, the ultimate loss is probably significantly higher than that.
“This is really a tax scheme designed to avoid payments, once profits start to flow on the Gorgon project and the Wheatstone project.”
In last year’s Senate inquiry into corporate tax avoidance, Chevron admitted it has hundreds of entitites registered in the tax havens of Bermuda and Delaware.
“Chevron abides by a stringent code of business ethics,” a statement to the media this week said.
“We comply with all applicable laws and regulations in the countries in which we operate"
“Chevron has paid about $3 billion in federal/state taxes and royalties in Australia over the past five financial years.
“Our current income tax profile reflects where we are in our investment lifecycle - funding costs for Gorgon and Wheatstone and R&D spending has largely offset current revenues.”