Message from the Chief Financial Officer
Businesses and society benefit when there is transparency and trust. This report is an important step towards greater transparency around Shell’s approach to paying taxes to governments around the world. We aim to offer a deeper understanding of our principles and actions in this area.
The payment of taxes is a central link between Shell and the countries and communities where we operate. It is a vital part of our contribution to national economies and people’s lives.
Taxes are the largest source of government revenue in most countries. They help pay for essential public services, such as health care, transport and schools. Governments develop tax regulations to support the health of their societies and economies.
Shell is committed to compliance. Specifically, we seek to comply with the applicable tax laws in all the countries and locations in which we have a taxable presence.
In 2018, Shell companies paid $10.1 billion in corporate income tax and $5.8 billion in royalties around the world. On behalf of governments, we also collected some $48.2 billion in excise duties, sales taxes and similar levies on our fuel and other products.
Shell was one of the first companies to endorse the B Team Responsible Tax Principles in 2018 because we want to make a meaningful contribution to the shaping of more transparent tax systems. We support an approach to taxation that, in our view, allows companies to help create a sustainable society.
In this Tax Contribution Report, we build on the disclosures we are legally required to make in our Annual Report and Form 20-F, and annual Payments to Governments Report, which details the $29.4 billion of taxes and other payments made in countries where Shell has exploration and production activities.
For the first time, we provide details of the corporate income tax we have paid in countries and locations in which we have a taxable presence, across all our businesses — Integrated Gas and New Energies, Upstream, Downstream, and Corporate, including our financing, insurance and treasury operations.
We have focused on corporate income tax because this is the area that has attracted the most questions from investors, non-governmental organisations and wider society.
But transparency is about more than just numbers. It is also about providing insight into our corporate structure and why we own entities in different countries and locations. It is about explaining why we pay the taxes we pay, and why we are not required to pay taxes in some jurisdictions.
It is about providing greater understanding of our business activities around the world: where we make our profits, and where we are investing.
I hope this report will help contribute to a wider discussion with other companies, governments, investors and non-governmental organisations. In this way, we can all contribute to building the fair, effective and stable tax regimes that benefit us all.
Chief Financial Officer