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In focus Taxation of renewable power

Shell’s Renewables and Energy Solutions business develops and supplies energy from solar and wind to businesses and homes. We trade and market this energy directly to customers or use it ourselves, in line with Shell’s target to become a net-zero emissions energy business by 2050.

As the energy transition unfolds, we expect the increase in the generation, trading and supply of renewable energy to impact the amount and type of taxes we pay in some countries. The type of customer, type of usage and the country where the supply and consumption take place could all impact taxes.

In some tax jurisdictions there may be tax incentives, such as subsidies, credits, exemptions and reduced rates to stimulate the generation and consumption of renewable power.

Shell is part of the Blauwwind consortium that built and operates the Borssele III & IV wind farm off the Dutch coast. (photo)
Shell’s Renewables and Energy Solutions business develops and supplies energy from solar and wind to business and homes.
Throughout this report, “country” is used as the primary descriptor for a geographical area because that is the word used by the OECD/G20 Base Erosion and Profit Shifting (BEPS) project in their proposal for country-by-country reporting (CbCR). This is one of the four minimum reporting standards to which over 100 countries have committed, covering the tax residence jurisdictions of nearly all large multinational enterprises (MNEs). In this report “country” may also refer to locations, jurisdictions or territories which have their own tax regimes or discrete rules.
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Tax incentives
There is no common definition of a tax incentive. Shell defines tax incentives as fiscal measures designed by governments to stimulate investment and encourage growth, or a change of behaviour, by providing more favourable tax treatment to some activities or sectors. Incentives can include accelerated tax relief for capital expenditure on infrastructure, exemptions from certain taxes where government economic targets (for example employment targets) are met, or a favourable tax treatment of costs related to research and development activities for certain technologies.
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