Payments to governments
Our operations generate revenue through taxes and royalties for governments around the world. Since 2016 Shell has made mandatory disclosures under the UK’s Reports on Payments to Governments Regulations 2014 (amended December 2015). We have published the revenues that our operations generate through taxes and royalties on a voluntary basis since 2012.
In 2018, Shell paid more than $64.1 billion to governments. We paid $10.1 billion in income taxes and $5.8 billion in government royalties, and collected $48.2 billion in excise duties, sales taxes and similar levies on our fuel and other products on behalf of governments.
The 2018 Payments to Governments Report details payments in 34 countries where Shell has upstream operations, including the basis of reporting and a breakdown by country. The report is prepared in accordance with the UK’s Reports on Payments to Governments Regulations 2014 (as amended in December 2015).
This is the fourth report issued by Shell under such Regulations. In fulfilling the requirements set out by the UK we are bound by these regulations, and are reporting on a different basis to the voluntary reports in the past. For example this report excludes payments related to refining, natural gas liquefaction or gas-to-liquids activities as these are not in scope of the UK regulations.
Tax binds governments, communities and businesses together. Revenue transparency provides citizens with important information to hold their government representatives accountable and to advance good governance. Shell is committed to transparency as it builds trust. Trust is essential for a company that operates in our line of business, reflecting our core values of honesty, integrity and respect for people.
By fulfilling the mandatory disclosures in line with the new UK legislative requirements we demonstrate that extraction of natural resources can lead to the opportunity of government revenue, economic growth and social development.
“We do not tolerate the direct or indirect offer, payment, solicitation or acceptance of bribes in any form.”
Culture of transparency
Constructive and responsible
At Shell, we have a zero-tolerance policy on corruption and bribery. They disrupt societies, they disrupt the level playing field among companies, and they threaten the viability of the long-term investments that characterise our industry. We do not tolerate the direct or indirect offer, payment, solicitation or acceptance of bribes in any form. Facilitation payments are prohibited.
Our Code of Conduct includes specific instructions to staff and mandatory training, especially with respect to potential conflicts of interest and the offer or acceptance of gifts and hospitality. A Global Helpline allows employees and business partners to seek advice and report any violations.
Our anti-bribery commitment is an integral part of the Shell General Business Principles, first published in 1976. So is our stance against political donations, which precludes Shell from making payments to political parties, organisations or their representatives.
In today’s fast-changing world, where energy plays a vital role, Shell is active as a constructive and responsible partner in public policy making, from advocating the implementation of effective government-led carbon pricing mechanisms to the protection of our ships against piracy. In all these endeavours, we favour a multi-stakeholder approach, working with others inside and outside our industry to achieve practical and effective solutions, beneficial to all parties involved.
Collaborating with others
In line with the Shell General Business Principles we support a number of external voluntary codes, which include the Organisation for Economic Co-operation and Development (OECD), Guidelines for Multinational Enterprises and the Business and Industry Advisory Committee to the OECD Statement of Tax Principles for International Business. We endorse the responsible tax principles set out by the B Team, a not-for-profit initiative formed by a group of global business leaders, and we work towards full implementation of these principles.
Shell supports co-operative compliance relationships with tax authorities on the basis of the framework proposed by the OECD Forum on Tax Administration. We have a co-operative compliance relationship in place in the United Kingdom, the Netherlands, Singapore and Italy, and a pilot relationship in Austria, and we continue to explore establishing similar relationships with other countries. Shell is also part of the OECD pilot International Compliance Assurance Program, which aims to facilitate open and cooperative engagements between multinational companies and tax administrations.
We provide the authorities with timely and comprehensive information on potential tax issues. In return we receive treatment that is open, impartial, proportionate, responsive and grounded in an understanding of our commercial environment. This approach improves the transparency of our tax affairs and allows Shell to better manage its tax-related risks throughout the life cycle of each project.
Transparency is only really effective if all parties in a country follow the same disclosure standards. Shell is a founder and board member of the Extractive Industries Transparency Initiative (EITI). Consistent with the EITI requirements, we continue to advocate mandatory country-by-country global reporting, as most tax payments are made at the corporate level to national governments. We support unified revenue reporting rules and standards applicable to all multinationals, irrespective of their ownership or place of business.
Shell is actively involved in the revenue transparency discussion and we are working with stakeholders to develop an approach which takes into account the views of the relevant stakeholders involved, i.e. industry, governments and civil society.
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The Shell General Business Principles state our insistence on honesty, integrity and fairness in all aspects of our business. The direct or indirect offer, payment, solicitation or acceptance of bribes is unacceptable.
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At Shell, we share a set of core values – honesty, integrity and respect for people – which underpin all the work we do. The Shell General Business Principles, Code of Conduct, and Ethics and Compliance Manual help everyone at Shell act in line with these values and comply with relevant laws and regulations.
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