ATO to increase compliance activity in relation to cross border funding arrangements

August 2017

As widely reported in the Australian media, Chevron Australia Holdings Pty Ltd (Chevron Australia) has reached a settlement in its long running dispute with the Australian Taxation Office (ATO) on the pricing of cross border intragroup funding. This turn of events will be significant to any Australian multinational that has cross border funding arrangements, and this comes at the end of a long running legal dispute between the ATO and Chevron Australia. Media reports suggest the total settlement could be in excess of AUD 1 billion. No doubt the amount in dispute plus potential interest, penalties and legal costs were all significant factors in the company’s decision to reach a negotiated settlement with the ATO.