Feb 29 Transocean Ltd
may face another $473 million in potential U.S. back taxes,
according to its annual regulatory filing, in which it also said
a judge partly cleared the company in a similar tax dispute
dating back eight years.
The company, owner of the world's largest offshore oil rig
fleet, said the latest assessment received this month for 2008
and 2009 related to accounting between subsidiaries, for both
engineering services performed between them and transfer pricing
for rig charters.
"If the authorities were to continue to pursue these
positions with respect to subsequent years and were successful
in such assertions, our effective tax rate on worldwide earnings
with respect to years following 2009 could increase
substantially," said Transocean, which booked an overall 2011
income tax expense of $395 million.
The $473 million of proposed adjustments exclude interest,
but the company said in the filing released this week that it
believed its tax returns were correct and planned to defend
against the claims.
The company declined to comment further on Wednesday.
Paying taxes is an especially big issue for rig contractors,
since most their assets are not fixed in one place.
Following President Barack Obama's 2008 election, Transocean
moved to Switzerland from the Cayman Islands to secure a low-tax
domicile. Noble Corp made the same shift soon after, and
Ensco Plc then went to Britain in a move that Rowan Cos
Inc said on Tuesday it would mimic.
In Norway last year, authorities indicted two
Transocean-owned companies and some advisers over suspicions of
tax fraud, alleging underpaid taxes of up to $1.8 billion.
The company has also faced other U.S. tax disputes in the
past, including claims related to transfer pricing in 2004,
though Transocean said a U.S. tax judge ruled in its favor on
Jan. 12 in that case and the adjustments were withdrawn.
The U.S. tax authorities also withdrew previously proposed
adjustments for 2005, apart from about $50 million related to
rig charter transfer pricing between its subsidiaries.
The company is still fighting a 2010 U.S. tax assessment of
$278 million for 2006 and 2007 involving the same two issues
relating to accounting between units, as well as about $295
million related to capital gains adjustments for 2006 to 2009
and a total of $248 million more for witholding taxes and