Tax transparency
One of the ways Shell makes a meaningful financial contribution to the countries where we operate is by paying taxes.
When we invest in a country, we seek to build long-term relationships and develop our business sustainably. We recognise our responsibility towards investors, governments, employees and the local communities we are part of. The taxes we collect and pay are one of the ways we fulfil this responsibility.
We provide our support through our commitment to compliance, transparency and open dialogue with our stakeholders, from governments to civil society. Our strategy and actions reflect our Shell values and principles.
Our approach to tax
Shell is committed to tax compliance
- We have a taxable presence in 99 jurisdictions.
- We file around 43,000 tax returns annually.
- We seek to protect the interests of our investors by managing our tax affairs in a sustainable way.
Shell is transparent on tax matters
- We publish our global approach to tax and the taxes we pay by jurisdiction.
- We publish payments on our extractive activities by project.
- We seek to provide tax authorities with timely and comprehensive information on potential tax issues.
Shell is open to dialogue
- We engage with society on tax matters.
- We promote co-operative compliance relationships.
- We give constructive input to industry groups and international organisations.
The Board of Directors of Shell plc approves our tax strategy, reviews its effectiveness and maintains sound internal controls.
The Executive Vice President Taxation and Corporate Structure is responsible for tax matters and provides assurance based on our tax control framework. The Audit and Risk Committee assists the Board in maintaining sound internal controls and oversight of Shell's financial reporting. A variety of standing matters and more specific topics are discussed by the committee throughout the year. The Board conducts an annual review, to its satisfaction, of the effectiveness of our financial, operational and compliance controls, including tax controls.
Christopher Rice - Executive Vice President Taxation and Corporate Structure“Tax is crucial to the effective functioning of societies around the world. Shell believes in paying taxes and being transparent about the taxes we pay in the countries where we operate. We are open to dialogue with governments and will continue to share details of our tax affairs through our annual Tax Contribution Report.”
Tax Contribution Report 2023
Each year, we publish information on our revenues, results and taxes paid, as well as on the principles we follow and the positions we advocate in our approach to tax.
Shell Responsible Tax Principles
The B Team Responsible Tax Principles were developed by companies, including Shell, civil society, investors and representatives from international institutions. We adopted The B Team Responsible Tax Principles as our own. The Shell Responsible Tax Principles guide our decisions on tax matters.
There are seven Shell Responsible Tax Principles:
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.
Our Tax Contribution Report and future publications aim to demonstrate how we are applying our Responsible Tax Principles.
Compliance
We are committed to compliance. We seek to comply with the letter and the spirit of the tax laws wherever we have a taxable presence. We expect to pay tax on profits where the business activity took place. When available and appropriate, we use tax incentives and exemptions.
Our aim is to take sustainable tax positions in support of our business investments, many of which are of a long-term nature. We plan our tax activities efficiently within boundaries set by our principles and overall tax strategy, and balance this with the aim of preserving value for shareholders. We do not define an acceptable level of tax risk, but rather we aim for certainty on tax positions.
Where tax law is unclear or subject to interpretation, we evaluate whether our position is more likely than not to be upheld and, where appropriate, seek an external opinion. We also escalate these uncertain tax positions to the Tax Leadership Team for their review and advice to the business.
We seek to resolve uncertainty in the interpretation of tax laws directly with tax authorities, including through advance tax agreements. We may also seek a co-operative compliance approach, which involves regularly and proactively engaging with tax authorities and providing them with real-time information before filing the tax return.
These arrangements offer an opportunity for early resolution, minimising the risk of future disputes. Where necessary, we will seek a clear resolution through the judicial system to test the legal principle of the tax law concerned.
Our tax and finance staff supported the filing of around 43,000 tax returns in 2023. We aim to adhere to international best practices and aim for accuracy and timeliness when we fulfil our tax filing obligations.
Our tax control framework, policies and guidelines set out the standards, controls, risk management and assurance that establish boundaries for our tax activities. Our tax control framework helps us to identify tax risks and sets out practical guidance for our staff, including the procedures for considering tax risks.
All ventures that we operate must conduct their activities in line with our business principles. The tax control framework is part of the Shell Performance Framework, which applies to each Shell entity, including its employees and contract staff and to Shell operated ventures. We monitor the adequacy of our system of risk management and internal controls throughout the year.
Our tax and data systems evolve continuously to deal with the growing demand for information from authorities.
We do not condone, encourage or support tax evasion. Compliance with all applicable laws and regulations of the countries in which we operate is embedded in the Shell General Business Principles and the Code of Conduct. Employees, contract staff and third parties with which Shell has a business relationship may raise ethical and compliance concerns, anonymously if preferred, through the Shell Global Helpline.
We regularly monitor relevant changes and developments in tax systems. We review our corporate and financing structures to confirm that our presence in all countries, including low-tax jurisdictions, is grounded in substantive and commercial reasons.
Shell may seek the support of an external adviser where specialist technical expertise is required that is not available within Shell or where additional resources are required.
Transparency timeline
We aim for an open dialogue on tax matters with governments, policymakers, businesses, investors, and civil society. Since 2003, we have taken important steps to be more transparent about the taxes we pay.
2003
- One of the initiators of the Extractive Industries Transparency Initiative (EITI).
2012
- First voluntary publication of tax payments in 14 countries.
- Publication of Shell's Approach to Tax.
2016
- First publication of Payments to Governments Report in line with European regulations (covering exploration and production activities).
2017
- Publication of Shell 鶹ý Tax Strategy and Statement on Tax Evasion.
- Shell's first country-by-country report submitted to tax authorities.
2018
- Pilot International Compliance and Assurance Programme.
- Shell commits to The B Team Responsible Tax Principles.
2019
- First publication of Shell's Tax Contribution Report
2022
- Shell helps develop and signs up to the Tax Governance Code in the Netherlands with members of the VNO-NCW industry association.
Our participation in the development of The B Team Responsible Tax Principles reflects our ambition to align our tax strategy more closely with emerging best practice.
Our Tax Contribution Report 2023 and future publications aim to demonstrate how we are applying our Responsible Tax Principles.
Open to dialogue
We welcome the opportunity to work with others in areas of shared interest. Our approach to tax considers the interests of relevant stakeholders. Through engagement with thought leaders, other companies, investors and civil society, we stay informed of developments that may impact our business.
We also regularly engage with policymakers to support the development of tax rules and regulations based on sound tax policy principles. In this way, we hope to contribute to the development of fair, effective and stable tax systems.
We also provide constructive input to industry groups and international organisations, such as the Extractive Industries Transparency Initiative (EITI), The B Team Responsible Tax Working Group and Business at OECD, an international business network.
