Central functions

Headquarters and central functions provide business support in communications, finance, health, human resources, information technology, legal services, real estate and security. We centralise services to support our businesses and these are located where the required skills and expertise are available. Centralised services could include a human resources team developing global training programmes or the purchase of software used across Shell.

Centralising services enables us to bring together and share specialised expertise and advice, while reducing costs. Most costs related to headquarters and central functions are recovered from the different Shell businesses.

The costs of centralised services are incurred in direct support of business operations and need to be fairly charged to the Group entities benefiting from these activities. This is known as and is closely monitored by governments and .

They check that group costs like these are charged appropriately and not overinflated or excessively charged to high-tax jurisdictions where they can be deducted from revenues and used to lower taxable profit. Operating companies using centralised services pay a fee in line with industry practice. This is typically based on the actual cost of providing these services, using methods endorsed by the .

Transfer pricing
This refers to the setting of the price for goods and services sold between related entities within a group. Transfer pricing should be based on the arm’s length principle. This means that profits are allocated to the countries where the relevant economic activity takes place and cannot be artificially taken somewhere else.
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Tax authority
Also known as a revenue agency. This is the body responsible for administering the tax laws of a particular country or regional or local authority.
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OECD stands for the Organisation for Economic Co-operation and Development which is an intergovernmental economic organisation with 36 member countries, founded in 1961 to stimulate economic progress and world trade.
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