PERTH (miningweekly.com) – The federal government has welcomed a Full Federal Court decision to dismiss oil and gas giant Chevron’s appeal of a A$340-million Australian Taxation Office (ATO) bill.

The court dismissed Chevron’s appeal against an ATO ruling that the US giant had used an intra-company loan as a means to shift profits offshore, and thus avoided paying income taxes in Australia.

Chevron told shareholders that the company was disappointed with the Federal Court outcome, and that it would review the decision to determine its next steps, which could include an appeal to the High Court of Australia.

“As recognised by the trial court in the dispute, the financing is a legitimate business arrangement and the parties differ only in their assessments of the appropriate interest rate to apply,” Chevron said.

“Chevron Australia pays a substantial amount of tax in Australia, including royalties, payroll tax, fringe benefits tax, excise and interest withholding tax. Since 2009, we’ve paid almost A$4-billion in federal and state taxes and royalties.

“We are one of Australia’s largest investors and employers. In addition to tax payments, Chevron will continue to deliver substantial economic benefits for decades to come.”

Federal Treasurer Scott Morrison said that the case was an example of why the government had 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 A$679-million in funding has strengthened the ATO’s capacity to identify, challenge and crack down on tax avoidance by multinationals.”

Morrison said that Australia was sending a “clear message” to multinational companies about paying tax on profits earned in the country. He also pointed to the Diverted Profits Tax that is expected to raise A$100-million in revenue a year from 2018/19, the Multinational Anti-Avoidance Law that has helped claw back A$2-billion in tax this financial year, increased penalties and updated transfer pricing rules, as measures recently implemented to strengthen the Australian tax system.