Message from the Chief Financial Officer

Jessica Uhl, Chief Financial Officer (photo)

Jessica Uhl, Chief Financial Officer

Taxes are a vital source of revenue for countries around the world and help to fund essential services like education, health care and transport. In times of crisis such as the COVID-19 pandemic, taxes are also central to government policies to support people’s lives and livelihoods.

The taxes Shell pays are one of the many links between our business and the countries and communities where we operate. Today, it is more important than ever that we are open about our tax payments so that people can understand how much we pay and why.

This is the second year we have published our Tax Contribution Report, which details the corporate income tax we have paid in 99 countries.

It shows that we made profits before tax of $25.5 billion in 2019, and that Shell companies paid $7.8 billion in corporate income tax and $5.9 billion in to governments. On behalf of governments, we also collected $47.6 billion in , and similar levies on our fuel and other products.

But transparency goes beyond the numbers. It is also about demonstrating our commitment to complying with legislation, and explaining our approach to tax and our company’s global structure. It is about showing why we own entities in different countries and locations around the world.

In 2019, we updated our approach to tax when we adopted the B Team Responsible Tax Principles. These principles, which we developed with other companies, investors and international institutions, set new standards for the creation of fairer and more effective tax systems.

As a result, we have reviewed our presence in low- and zero-tax jurisdictions, countries with significantly lower tax rates than the average. We have ended some activities in Switzerland and Bermuda following this review, which you can read about in this report.

We must keep asking ourselves whether our presence in these low-tax jurisdictions is still necessary for our business.

Next, we plan to review our reporting of tax incentives, including exemptions and reliefs. Governments around the world use tax incentives to encourage investment, job creation and to support certain industries. More transparency about these incentives will lead to greater understanding of what they are intended to achieve, and the responsibilities of businesses.

Shell will continue to promote transparency on how companies approach tax and how much they pay. We are calling on companies to disclose more information so that governments, investors and non-governmental organisations, as well as wider society, can better understand the tax payments companies make.

Jessica Uhl
Chief Financial Officer

Royalties are generally payment due for the use of an asset. Mineral royalties are payments to governments or other owners for the rights to extract oil and gas resources, typically at a set percentage of revenue less any deductions that may be taken. See also Trademark royalties.
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Excise duties
This is a tax on manufacturers and is due at the point of production rather than sale. Companies which manufacture products that are subject to excise duties are responsible for reporting and paying these taxes. Excise taxes are in addition to other forms of indirect tax, such as customs duties, VAT or GST, and typically form part of the cost of the product.
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Consumption taxes
A tax due on the purchase of goods and services. Typically, this is a percentage of the sales price of the item or service. It is an indirect tax as it is levied and administered by the retailers or service providers but it is borne or paid by the individual purchasing the item. The companies that charge the tax have to administer the collection and payment on behalf of the government.
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