Besitzen Sie diesen Inhalt bereits,
melden Sie sich an.
oder schalten Sie Ihr Produkt zur digitalen Nutzung frei.
Intra-Group Loan Financing and the Arm’s Length Principle
Review of the Federal Court Decision on Chevron Australia – Australia’s Recent Large Transfer Pricing Case
The Chevron case deals with the interpretation of the arm’s length principle in the context of inbound intra-group financing arrangements and the new (retrospectively applied) Australian transfer pricing provision (Subdivision 815 –A). The case has been appealed and has very important parallels to the famous Canadian GE Capital Inc. case as well as the new amendments implemented to the OECD Transfer Pricing Guidelines as a result of BEPS Actions 8–10, mainly with regard to topics such as risk, delineation of the actual transaction, and implicit support, and, to some extent, the importance of the rating approach in benchmarking loans.
1. The Facts
Central to the court proceedings was a USD 2.5 billion credit facility agreement (dated 6 June 2003) between Chevron Finance US (a wholly-owned US-based finance company) and its parent company Chevron Australia Holdings (a subsidiary of the US-based Chevron Corporation [Chevron Corp.]). Under the credit facility agreement, Chevron Finance US agreed to advance to Chevron Australia Holdings up to the Australian dollar equivalent of 2.5 billion USD; the interest was payable monthly at a rate equal to 1 month AUD-LIBOR-BBA rates + 4.14 %; the fi...