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Intra-group transactions

Our businesses are supported by many services, including information technology, finance, legal and human resources. We organise most of these services centrally to share specialist expertise and make efficient use of resources.

Central functions

Headquarters and central functions provide business support in communications, finance, health, human resources, information technology, legal services, real estate and security. For example, central services could include a human resources team developing global training programmes or an information technology team purchasing software used across Shell.

The centralisation of services enables us to support our businesses by bringing together and sharing specialised expertise and advice, while reducing costs. The costs of such centralised services are incurred in direct support of business operations and need to be charged fairly to the Group entities benefiting from these activities. This is known as transfer pricing and is closely monitored by governments and tax authorities. They check that costs like these are charged appropriately and only once.

Allocation of costs

Shell's centralised services and business service centres charge fees for services that provide a benefit for the receiving entities and which these entities would have been willing to pay a third party to provide. Shell's operating companies using centralised services pay a fee, which is based on the actual cost of providing the services. The cost of these services needs to be charged fairly to the entities benefiting from the services.

All Group entities should bear their fair share of the costs. Costs are not excessively charged to entities in higher-tax jurisdictions where they could be deducted and used to manipulate taxable profit to a lower level. In cases where there is just one recipient of a service, the entity pays a direct fee for the service it has received based on the actual cost of the service. However, if there are different entities receiving the same service, they share the cost. Their share is allocated proportionately based on an appropriate measure of the use of the service, for example capital and operating expenditure, staff employed or orders processed.

Shell's service cost allocation system, including the proportionate allocation of costs, is set up and operated in accordance with the guidance provided by the OECD.

Shell Business Operations

  • Business service centres: Our businesses are supported by business service centres around the world. The choice of location for these centres is based on available expertise and costs, which compare favourably with alternative outsourcing solutions. The centres provide significant employment opportunities with around 20,000 staff worldwide in 2022. Some of their activities benefit from local tax exemptions where, for example, certain employment levels are met.
  • Information technology (IT): IT provides capabilities that improve the way we do business. IT services are centralised in India and Malaysia.
  • Human resources (HR): HR focuses on reviewing, monitoring and guiding the business processes and systems that affect our employees, such as staff recruitment, on-boarding, retention and motivation. Human resources services are centralised in Poland, Malaysia and the Philippines.
  • Legal: The Global Operations team within Legal is located within the Shell Business Operations Business service centres, and it provides legal advice and support to many portions of the businesses and functions. This team within Legal is centralised in Poland and Malaysia.
  • Finance and data operations: These provide the businesses with access to reliable data and analysis of their financial profiles and performance, as well as accounting, tax return and billing services. Finance and data operations are centralised in Poland, the Philippines and India.


The oil and gas industry can face severe, low-frequency risks. Globally, there are few insurers who can insure appropriately against some of these risks. Shell – like other major oil and gas companies – self-insures most of its insurable risk exposure.

Shell's principal insurance company, Solen Versicherungen AG (Solen), is based in Switzerland where we have qualified insurance specialists to manage our insurance activities. This includes underwriting, risk management, claims handling and balance sheet management. Solen does not outsource any of its critical business functions.

Solen offers a range of insurance products and services to Shell operating companies and joint-venture companies, including those that are not controlled by Shell. Solen's insurance policies are set with reference to policy terms, conditions and prices that are commercially available from external insurance companies operating in the energy sector.

Solen has a licence to conduct insurance business from the Swiss insurance regulator (the Swiss Financial Market Supervisory Authority, FINMA). FINMA's regulatory requirements for Solen are the same as for independent insurance companies.

Solen maintains the required level of capitalisation to comply with Swiss regulatory and rating agency requirements. Solen's capital is maintained at a level that ensures an 'A' rating from global credit rating agency AM Best. This is higher than the Swiss solvency requirements and allows Solen to enter into commercial arrangements with third-party insurance suppliers and joint-venture customers. Solen uses robust methodologies and governance processes to assess, mitigate and manage the risk of its insurance, re-insurance and associated investment functions that provide a commercial benefit to Shell-controlled and some non-Shell-controlled operating companies.


Daily Treasury operations include managing the Group's cash, liquidity and foreign exchange requirements for the different currencies that are needed by Shell around the world. Treasury also advises on the financing of Group subsidiaries and joint ventures and manages the Group's surplus funds and external bank accounts. It is also responsible for issuing external and internal guarantees to ensure contractual and regulatory obligations are met and that Shell's licence to operate is maintained.

Oil, gas and renewables projects, which can take years to develop, need significant capital. Our operating companies require a balance between equity and long-term loan funding. We have three Treasury centres located in the UK, Singapore and the USA to provide short-term financing and take deposits from Group companies. We also have Treasury companies that provide long-term financing, primarily out of the Netherlands, the UK and Singapore.

Treasury reviews the funding needs of Shell's operating companies around the world on a case-by-case basis to ensure there is an appropriate mix of equity and debt. Treasury manages deposits from operating companies that generate cash. This cash, the returns from operating companies plus external debt, is used to provide long- and short-term funding, including loans with interest due and paid as if these loans had been sourced from external financial markets or institutions.

Related-party lending, borrowing, guarantee offers and acceptance, and governance processes are decided by the lending and borrowing companies respectively, independently and on a stand-alone basis.

Intellectual property

Shell companies have access to specialist expertise in long-term brand building, consistent brand strategy and global marketing campaigns. Local operating companies focus on local execution and on shorter-term marketing strategies tailored to their markets.

Centralised services provide advice on all intellectual property including patents, industrial design, copyright and trademarks.

Shell female employee working on-site and handling heavy equipment, wearing red branded workwear (photo)

Our approach to transfer pricing

Transfer pricing refers to the setting of prices for goods and services sold between related entities within a group. Shell applies the internationally recognised arm's length principle, where profits from the sale of goods or services are allocated to the countries where the relevant economic activity takes place and cannot be artificially taken somewhere else. The arm's length principle ensures that individual group members are taxed on their transactions with each other, as if they were comparable independent enterprises operating in the open market under similar circumstances.

Shell also follows the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, as incorporated in applicable local tax laws. The guidelines outline transfer pricing methods that can be used to apply the arm's length principle in practice. These methods are applied consistently across the Group.

Shell has a structured approach to transfer pricing accountabilities and responsibilities. The responsibility for transfer pricing matters lies with Shell's Global Transfer Pricing (TP) team and Finance Operations (FO) TP team. The Global TP team provides support to Shell businesses, assists in any engagement with tax authorities and gives guidance for projects. The FO TP team focuses on compliance, including the preparation of documents according to OECD recommendations and country regulations.

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 project in their proposal for country-by-country reporting. This is one of the four minimum reporting standards to which around 135 countries have committed, covering the tax residence jurisdictions of nearly all large multinational enterprises. 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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Fees and other sums paid as consideration for acquiring a licence for gaining access to an area where extractive activities are performed. Administrative government fees that are not specifically related to the extractive sector, or to access to extractive resources, are excluded from this report. Also excluded are payments made in return for services provided by a government.
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Organisation for Economic Co-operation and Development (OECD)
The OECD is an intergovernmental economic organisation with 38 member countries, founded in 1961 to stimulate economic progress and world trade.
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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, which 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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