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ExxonMobil (XOM) to Delay Tax Payments in Australia Till 2021
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ExxonMobil Corporation (XOM - Free Report) recently attended an Australian Senate hearing for not paying taxes since 2013.
Per the hearing, which forms part of a broader investigation related to corporate tax avoidance in Australia, the oil giant has evaded tax payments despite reporting large income from operations in the country.
ExxonMobil stated that it is in a tax loss position mainly because of $21-billion capital investment in the country over the last 10 years. These investments mainly went into operations in the Bass Strait and the massive Gorgon gas project offshore Western Australia. However, the company has agreed to pay taxes after recovering funds from investments made in the country.
ExxonMobil expects to start paying A$600 million a year in corporate tax starting 2021, while the Gorgon project is unlikely to begin paying petroleum resource rent tax until the mid-2030s.
Currently, ExxonMobil is being scrutinized under an Australian tax audit connected to an inter-company or related party loan. Even if the Australian Taxation Office succeeds in the dispute, it will not have a significant impact on the company’s tax losses.
In 2017, Chevron Corp (CVX - Free Report) lost a case to the Australian government in a landmark case over a contested tax bill of A$340 million ($267 million) stemming from a related party loan at an unusually high interest. The loan reduced the oil giant's taxable income in Australia.
However, ExxonMobil stated that the facts in its loan under audit were very different from Chevron's, since the interest rates on its loan were set at about 3-5%.
The Senate is likely to issue a final report relating to the probe into corporate tax avoidance by the end of May. The probe that began in 2014 was a necessity, as close examination revealed a complex web of hundreds of foreign subsidiaries, which were avoiding tax.
The country's tax authorities are already fighting major miners BHP Billiton and Rio Tinto as well as oil and gas giants over booking income in countries like the Netherlands and Singapore, where tax rates are lower.
Price Performance
ExxonMobil’s shares have lost 11.3% in the last three months, compared with the industry’s 2.4% decline.
Statoil, based in Norway, is a major international integrated oil and gas company. It witnessed an average positive earnings surprise of 23.2% in the last four quarters.
ConocoPhillips, based in Houston, TX, is a major global exploration and production company. It came up with a positive surprise of 144.45% in the last four quarters.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Image: Bigstock
ExxonMobil (XOM) to Delay Tax Payments in Australia Till 2021
ExxonMobil Corporation (XOM - Free Report) recently attended an Australian Senate hearing for not paying taxes since 2013.
Per the hearing, which forms part of a broader investigation related to corporate tax avoidance in Australia, the oil giant has evaded tax payments despite reporting large income from operations in the country.
ExxonMobil stated that it is in a tax loss position mainly because of $21-billion capital investment in the country over the last 10 years. These investments mainly went into operations in the Bass Strait and the massive Gorgon gas project offshore Western Australia. However, the company has agreed to pay taxes after recovering funds from investments made in the country.
ExxonMobil expects to start paying A$600 million a year in corporate tax starting 2021, while the Gorgon project is unlikely to begin paying petroleum resource rent tax until the mid-2030s.
Currently, ExxonMobil is being scrutinized under an Australian tax audit connected to an inter-company or related party loan. Even if the Australian Taxation Office succeeds in the dispute, it will not have a significant impact on the company’s tax losses.
In 2017, Chevron Corp (CVX - Free Report) lost a case to the Australian government in a landmark case over a contested tax bill of A$340 million ($267 million) stemming from a related party loan at an unusually high interest. The loan reduced the oil giant's taxable income in Australia.
However, ExxonMobil stated that the facts in its loan under audit were very different from Chevron's, since the interest rates on its loan were set at about 3-5%.
The Senate is likely to issue a final report relating to the probe into corporate tax avoidance by the end of May. The probe that began in 2014 was a necessity, as close examination revealed a complex web of hundreds of foreign subsidiaries, which were avoiding tax.
The country's tax authorities are already fighting major miners BHP Billiton and Rio Tinto as well as oil and gas giants over booking income in countries like the Netherlands and Singapore, where tax rates are lower.
Price Performance
ExxonMobil’s shares have lost 11.3% in the last three months, compared with the industry’s 2.4% decline.
Zacks Rank & Key Picks
ExxonMobil carries a Zacks Rank #3 (Hold). A few better-ranked players in the same sector are Statoil ASA and ConocoPhillips (COP - Free Report) , each stock sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Statoil, based in Norway, is a major international integrated oil and gas company. It witnessed an average positive earnings surprise of 23.2% in the last four quarters.
ConocoPhillips, based in Houston, TX, is a major global exploration and production company. It came up with a positive surprise of 144.45% in the last four quarters.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>