Chevron Corporation's global tax counsel Sandy Macfarlane has dismissed reports that a Delaware subsidiary paid $248 tax on an estimated $1.7 billion profit from Australian interest payments, telling the Senate tax inquiry that under US law none of the amount was taxable.
"It's a filing fee or something," Mr Macfarlane said.
"So the $248 is wrong because it's actually zero tax," Labor senator Sam Dastyari said.
Mr Macfarlane and Chevron Australia chief executive Roy Krzywosinski faced a torrid grilling by the Senate committee over a $269 million Federal Court judgment against Chevron last month. The case involved a US subsidiary which borrowed $US2.45 billion in 2003 at an average of less than 2 per cent interest, and on-lent the money to Chevron Australia at an average of 9 per cent interest.
Chevron managing director Roy Krzywosinski faced a torrid grilling by the Senate committee.
In a later session, Deputy Tax Commissioner Jeremy Hirschhorn said Chevron had acknowledged in its testimony that its current $36.5 billion ($51.4 billion) debt was a hybrid-debt structure which did not pay tax on its interest profits in Australia or the US.
"As you heard today, both the old arrangement and the new arrangements are effectively hybrid arrangements," Mr Hirschhorn said.
The OECD's Base Erosion Profit Shifting project specifically targeted hybrid-debt structures which paid no tax on transactions in any country, he said.
Mr Hirschhorn said foreign oil and gas companies were pushing the envelope in their funding structures, "in some cases pushing it too far".
Mr Macfarlane attacked reports in The Australian Financial Review relating to the $1.85 billion that Chevron Australia paid to its Delaware parent, Chevron Australia Petroleum Company, in interest payments on related-party debt as "completely mistaken".
Source: Neil Chenoweth - AFR