Shell Responsible Tax Principles

1 of 7
2 of 7
3 of 7
4 of 7
5 of 7
6 of 7
7 of 7
  • Principle 1: Accountability and governance

    Tax is a core part of corporate responsibility and governance and is overseen by the board of directors (the Board).

    • We have a tax strategy and set of principles approved by the Board
    • The Board is accountable for the tax strategy and responsibility for tax risk management is clearly delegated to key individuals and overseen by an established board sub-committee (e.g. Audit and Risk)
    • We put mechanisms in place to ensure awareness of and adherence to our tax strategy and principles and provide opportunities for employees to confidentially raise any issues of concern
    • We have clear procedures in relation to tax risk management and carry out risk assessments before entering into any tax planning on significant transactions
    • We report at least annually to the Board (or delegated sub-committee) on tax risks and adherence to the tax strategy
    • Our tax strategy and principles apply to all our local tax practices in all jurisdictions, and wherever possible to all subsidiaries and entities
    • We employ appropriately qualified and trained tax professionals with the right levels of expertise and understanding
  • Principle 2: Compliance

    We are committed to complying with the tax legislation of the countries in which we operate and pay the right amount of tax at the right time in the countries where we create value.

    • We prepare and file all tax returns required, providing complete, accurate and timely disclosures to all relevant revenue authorities
    • Our tax planning is based on reasonable interpretations of applicable law and is aligned with the substance of the economic and commercial activity of our business
    • We will not undertake transactions whose sole purpose is to create a tax benefit which is in excess of a reasonable interpretation of relevant tax rules (legislation, regulation or treaties)
    • We aim for certainty on tax positions but where tax law is unclear or subject to interpretation we evaluate whether our position would more likely than not, be upheld and, where appropriate seek external opinion
    • We use the arm’s length principle, pricing in line with best practice guidelines issued by the OECD, and apply this consistently across our businesses (contingent on local laws)
  • Principle 3: Business structure

    We will only use business structures that are driven by commercial considerations, are aligned with business activity and which have genuine substance. We do not seek abusive tax results.

    • The Group is transparent about the entities that it owns around the world and about who owns them
    • We do not use so-called tax havens in order to avoid taxes on activities which take place elsewhere. Entities which are based in low or zero tax rate jurisdictions exist for substantive and commercial reasons
    • We pay tax on profits according to where value is created within the normal course of commercial activity. We do not use artificially fragmented structures or contracts to avoid establishing a taxable presence in jurisdictions where we do business
    • Our tax principles extend to our relationships with employees, customers and contractors. We will not engage in arrangements whose sole purpose is to create a tax benefit which is in excess of what is reasonably understood to be intended by relevant tax rules
  • Principle 4: Relationships with authorities

    We seek, wherever possible, to develop cooperative relationships with tax authorities, based on mutual respect, transparency and trust.

    • We follow established procedures and channels for all dealings with tax authorities, government officials, ministers and other third parties, in a professional, courteous and timely manner
    • We are open and transparent with tax authorities, responding to relevant tax authority enquiries in a straightforward and timely manner (providing information held in other jurisdictions where relevant) to assist in the evaluation of tax liability
    • We endeavour to build relationships of cooperative compliance with tax authorities where both parties engage in a proactive and constructive dialogue to discuss tax planning strategy, risks and significant transactions
    • Where there are misunderstandings of fact or law, we will seek to work with tax authorities, where possible, to identify the issues and explore options to resolve any misunderstandings or disagreements
    • If we seek rulings from tax authorities to confirm an applicable tax treatment, we do so based on full disclosure of all the relevant facts and circumstances
    • We will seek to enter into an early dialogue with tax authorities, wherever possible, where there is significant uncertainty about how the tax rules apply to our business
    • We will not bribe or otherwise induce tax officials, government officials or ministers with the aim of obtaining more beneficial outcomes with respect to tax matters
  • Principle 5: Seeking & accepting tax incentives

    Where we claim tax incentives offered by government authorities, we seek to ensure that they are transparent and consistent with statutory or regulatory frameworks.

    • Where we accept tax incentives offered by a government authority to support investment, employment and economic development, we will seek to implement these in the manner intended by the relevant statutory, regulatory or administrative framework
    • We will only use tax incentives where they are aligned with our business and operational objectives and where they require economic substance
    • Ideally, tax exemptions and reliefs should be specified by law and generally available to all market participants. Where there are exceptions, we will work with relevant authorities to encourage publication of those incentives and contracts
    • We will make data available for governments to assess the revenue and economic impacts of specific tax concessions where appropriate
  • Principle 6: Supporting effective tax systems

    We engage constructively in national and international dialogue with governments, business groups and civil society to support the development of effective tax systems, legislation and administration.

    • We give constructive input to industry groups, governments and other external bodies (e.g. OECD and the EU) and engage with civil society on tax issues in order to contribute to the development of future tax legislation and practice
    • We support initiatives to help develop the capability of tax authorities and systems if requested
    • We promote responsible tax practices which are in line with The B Team Responsible Tax Principles through our involvement in industry associations and other governmental or external bodies and, where appropriate, through our relationships with suppliers, contractors and customers
  • Principle 7: Transparency

    We provide regular information to our stakeholders, including investors, policy makers, employees, civil society and the general public, about our approach to tax and taxes paid.

    • A tax strategy or policy, including details of governance arrangements, our tax risk management strategy and our approach to dealing with tax authorities
    • A regular update on our progress and key issues related to our tax strategy and principles
    • An overview of our group structure and a list of all entities, with ownership information and a brief explanation of the type and geographic scope of activities
    • An explanation of why we have subsidiaries, branches and joint ventures operating in low-tax jurisdictions
    • Annual information that explains our overall effective tax rate and gives information on the taxes we pay at a country level, together with information on our economic activity
    • Information on financially-material tax incentives (e.g. tax holidays) where appropriate, including an outline of the incentive requirements and when it expires
    • An outline of the advocacy approach we take on tax issues, the channels through which we engage in regard to policy development and the overall purpose of our engagement