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Chevron Loses $260M Appeal Against Australian Tax Office
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The Australian subsidiary of multinational energy giant Chevron Corporation (CVX - Free Report) recently lost an appeal against the Australian Tax Office contesting a tax bill of $260 million. The bill includes penalties and interest payable by Chevron.
In a unanimous decision by three judges of the Australian Federal Court, the company’s appeal against tax assessments for the 2004–08 period was rejected. The court found that Chevron had decreased its tax cost in Australia through a tax-deductible interest payment of 9% on a $2.5 billion loan from its American affiliate, Chevron Texaco Funding Corp. This subsidiary had borrowed the amount at a lower interest rate.
Chevron is looking at legal steps to challenge the court’s decision and may move to the Australian High Court for this purpose.
Notably, this is one of the first cases for multinational companies as well as governments that highlights the implementation of transfer pricing rules and tax obligations for interests paid on cross-border intercompany loans.
About the Company
Chevron is one of the largest integrated energy companies in the world. Headquartered in San Ramon, CA, the company conducts business in approximately 180 countries. It is also involved in every aspect of the oil and natural gas industry, including exploration and production, refining, marketing and transportation, chemicals manufacturing and sales, as well as power generation.
Price Performance
In the last six months, Chevron’s shares outperformed the Zacks categorized Oil and Gas - International - Integrated industry. The company’s shares gained 4.11%, whereas the industry recorded a decrease of 1.05%.
Zacks Rank and Stocks to Consider
Chevron presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in oil and energy sector include Enerplus Corporation (ERF - Free Report) , Antero Resources Corporation (AR - Free Report) , and Bellatrix Exploration Ltd. . All these companies sport Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Enerplus Corporation is expected to witness current year sales growth of 66.12% year over year. The company had an average positive earnings surprise of 66.67% in the last four quarters.
Antero Resources is expected to record 8.88% year-over-year growth in 2017 sales. The company had an average positive earnings surprise of 239.10% in the last four quarters.
Bellatrix’s year-over-year sales estimate for the current quarter is expected to rise by 20.13%. The company had an average positive earnings surprise of 58.54% in the last four quarters.
More Stock News: This Is Bigger than the iPhone!
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Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Chevron Loses $260M Appeal Against Australian Tax Office
The Australian subsidiary of multinational energy giant Chevron Corporation (CVX - Free Report) recently lost an appeal against the Australian Tax Office contesting a tax bill of $260 million. The bill includes penalties and interest payable by Chevron.
In a unanimous decision by three judges of the Australian Federal Court, the company’s appeal against tax assessments for the 2004–08 period was rejected. The court found that Chevron had decreased its tax cost in Australia through a tax-deductible interest payment of 9% on a $2.5 billion loan from its American affiliate, Chevron Texaco Funding Corp. This subsidiary had borrowed the amount at a lower interest rate.
Chevron is looking at legal steps to challenge the court’s decision and may move to the Australian High Court for this purpose.
Notably, this is one of the first cases for multinational companies as well as governments that highlights the implementation of transfer pricing rules and tax obligations for interests paid on cross-border intercompany loans.
About the Company
Chevron is one of the largest integrated energy companies in the world. Headquartered in San Ramon, CA, the company conducts business in approximately 180 countries. It is also involved in every aspect of the oil and natural gas industry, including exploration and production, refining, marketing and transportation, chemicals manufacturing and sales, as well as power generation.
Price Performance
In the last six months, Chevron’s shares outperformed the Zacks categorized Oil and Gas - International - Integrated industry. The company’s shares gained 4.11%, whereas the industry recorded a decrease of 1.05%.
Zacks Rank and Stocks to Consider
Chevron presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in oil and energy sector include Enerplus Corporation (ERF - Free Report) , Antero Resources Corporation (AR - Free Report) , and Bellatrix Exploration Ltd. . All these companies sport Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Enerplus Corporation is expected to witness current year sales growth of 66.12% year over year. The company had an average positive earnings surprise of 66.67% in the last four quarters.
Antero Resources is expected to record 8.88% year-over-year growth in 2017 sales. The company had an average positive earnings surprise of 239.10% in the last four quarters.
Bellatrix’s year-over-year sales estimate for the current quarter is expected to rise by 20.13%. The company had an average positive earnings surprise of 58.54% in the last four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>