A multinational corporation labelled Australia's worst tax avoider by members of a Senate inquiry has added $7 billion to an "in house" loan that critics say is designed to shift billions of dollars of income offshore.

Key points: One expert says move "a tax scheme designed to avoid payments"

One expert says move "a tax scheme designed to avoid payments" Another says Chevron running up debt to offset Australian tax bill on future profits from its gas reserves

Another says Chevron running up debt to offset Australian tax bill on future profits from its gas reserves Chevron says company abides by a stringent code of business ethics

Chevron's latest financial accounts show that a shell company in Delaware has now lent a total of $42 billion to Chevron Australia Holdings Pty Ltd, the Chevron subsidiary developing the vast Gorgon gas project in Australia's northwest.

"It really shows continuing contempt for the Australian Government and the Australian people," Jason Ward, a researcher with the union-backed ITF, told the ABC.

"This is really a tax scheme designed to avoid payments, once profits start to flow on the Gorgon project and the Wheatstone project."

Dr Mark Zirnsak, a spokesman for the Tax Justice Network, also said it looked like Chevron was trying to avoid paying taxes in Australia.

"It does look like further tax dodging by Chevron, loading itself up with debt from the US tax haven of Delaware in order to avoid paying taxes here in Australia," Dr Zirnsak, who is also a director for the Justice and International Mission Unit of the Uniting Church Synod of Victoria and Tasmania, said.

Chevron maintains that the arrangement between the Delaware shell company and its Australian subsidiary is a bona-fide loan to fund construction on the gas projects.

But the arrangement will have the effect of reducing Chevron's tax bill in Australia by many billions of dollars.

Chevron's Australian company owned by shell: Ward

The interest charges on the $42 billion "credit facility" totalled $2.2 billion dollars in the past year, but the debt is not being repaid.

Chevron is running up the debt to offset against the Australian tax bill on future profits from its gas reserves.

"What happens is the primary Australian company is owned by a shell company in Delaware," Mr Ward said.

"This is actually the definition of a shell company: it had a different name, its name was changed, and it has no employees.

"It pays $175 in annual filing fees to the State of Delaware and it reduces Chevron's taxes in Australia by [the Australian subsidiary] paying interest payments to the company in Delaware which doesn't get taxed.

"Chevron has admitted that as much as $15 billion could be lost from this current tax scheme, but now that there's an extra $7 billion on that loan, the ultimate loss is probably significantly higher than that."

Labor senator Sam Dastyari has labelled the Chevron scheme a "rort" and called the company the "godfather" of tax avoidance.

Chevron is appealing a Federal Court ruling last year that found a separate related party loan arrangement, ruling that it was not a genuine "arms length" loan, but was a ruse that levied a non-commercial interest rate in order to shift profits from Australia offshore.

The tax office is auditing the $42 billion loan arrangement between Chevron Australia Holdings and its nominal "parent", the Delaware shell company Chevron Australia Petroleum.

Chevron says it 'abides by a stringent code of business ethics'

At a Senate inquiry into corporate tax avoidance last year, Chevron admitted to having about 200 entities registered in the tax haven of Bermuda and a similar number in Delaware.

The new revelations about Chevron's tax minimisation come after moves by the Australian Government to crack down on multinational tax avoidance.

Chevron's accounts reveal its Australian subsidiary issued $2.9 billion in shares to its nominal US parent in an attempt to comply with new "thin capitalisation" rules announced in the May budget, which are designed to stop multinationals loading up subsidiaries with debt to minimise tax.

But that equity is dwarfed by the additional $7 billion dollars in debt.

In a statement to the ABC, a company spokesman said: "Chevron abides by a stringent code of business ethics, under which we comply with all applicable laws and regulations in the countries in which we operate".

"Chevron has paid about $3 billion in federal/state taxes and royalties in Australia over the past five financial years," the statement read.

"Our current income tax profile reflects where we are in our investment lifecycle — funding costs for Gorgon and Wheatstone and R&D spending has largely offset current revenues."

Modelling commissioned by Chevron claims that by 2040, the company's projects and other activity will deliver more than $1 trillion to Australia's gross domestic product (GDP), 5,000 jobs a year in Australia, and more than $338 billion to Federal Government revenue.