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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Chevron Corporation | NYSE:CVX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.61 | 0.37% | 165.89 | 166.98 | 163.30 | 165.31 | 9,709,809 | 00:59:10 |
By Bradley Olson
U.S. oil companies have been pushing for changes to U.S. corporate tax laws that require them to pay taxes on foreign earnings, and news that the European Union's antitrust regulator is requiring Ireland to claw back billions in tax dollars from Apple Inc. could strengthen their case.
Oil chiefs, like many other executives in different sectors, have said federal tax policy represents double taxation because companies have to pay to other countries for operations there and then face U.S. taxes on world-wide earnings.
"American companies are disadvantaged on tax policy," John Watson, the CEO of Chevron Corp., said in an interview with The Wall Street Journal in April. "We have to have a dialogue about what will be effective policies to enable American companies to compete and have a level playing field."
Due to a U.S. exemption that doesn't require the payment of taxes if cash isn't repatriated, many companies have avoided reinvesting some overseas profits into U.S. operations. One example in recent years was Devon Energy Corp., an Oklahoma City oil and gas producer.
Devon sold assets in Brazil and Azerbaijan for more than $7 billion, but the company kept an overseas cash balance of at least $6 billion for more than a year to avoid paying U.S. taxes on the money. Devon invested the money into oil sands projects in Canada to avoid paying a U.S. tax bill that would have exceeded $1 billion, company officials said.
The biggest U.S. oil companies, such as Exxon Mobil Corp. and Chevron, have an effective global tax rate that usually is above 40%, among the highest in any industry. Yet those companies pay a much lower amount in U.S. federal taxes.
In the last two years, oil-and-gas companies have endured the worst price crash in a generation, so many are booking losses, which reduces the amount of taxes that could be claimed by foreign regulators such as the EU in its case against Apple.
Mr. Watson at Chevron and others have said they support eliminating industry tax benefits if the corporate tax rate is reduced. Among the largest: deductions for so-called "intangible drilling costs," or the many costs associated with tapping new oil and gas wells. The Obama administration has repeatedly sought to eliminate such beneficial tax policies for the energy industry, usually in annual budget proposals, but those efforts have failed.
Write to Bradley Olson at Bradley.Olson@wsj.com
(END) Dow Jones Newswires
August 30, 2016 12:52 ET (16:52 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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