About Shell

Royal Dutch Shell plc[1] directly or indirectly holds investments in companies that explore for oil and gas worldwide; develop new oil and gas supplies and have a global network of refineries, chemical plants, and retail sites. Shell companies also transport and trade oil, gas and energy-related products, as well as investing in alternative energy and biofuels production.

Approach to Tax

For Shell, paying taxes in the countries where we operate is about more than complying with the law. It is about showing that extraction of natural resources provides governments with an opportunity to generate revenues, support economic growth and enhance social development.

Tax strategy

Shell’s Tax strategy supports our global strategy.

Shell’s strategic ambition is as follows:

  • to provide a world-class investment case. This involves growing free cash flow and increasing returns, all built upon a strong financial framework and resilient portfolio;
  • to thrive in the energy transition by responding to society’s desire for more and cleaner, convenient and competitive energy; and
  • to sustain a strong societal licence to operate and contribute to society through a shared value approach to our activities.

The execution of our strategy is founded on becoming a more customer-centric and simpler company, focused on delivering higher and more predictable returns and growing free cash flow. By investing in competitive projects, driving down costs and selling non-core businesses, Shell continues to seek to reshape its portfolio into a more resilient and focused company.

Our ability to achieve our strategic ambitions depends on how we respond to competitive forces. We continuously assess the external environment – the markets as well as the underlying economic, political, social and environmental drivers that shape them – to evaluate changes in competitive forces and business models. We undertake regular reviews of the markets we operate in and analyse our traditional and non-traditional competitors’ strengths and weaknesses to understand our competitive position. We maintain business strategies and plans that focus on actions and capabilities to create and sustain competitive advantage. We maintain a risk management framework that regularly assesses our response to, and risk appetite for, identified risk factors.

We use legitimate tax incentives and exemptions designed by governments to promote investment, employment and economic growth.

When considering the viability of investments, tax is only one of the factors we examine, and income tax is just one part of the overall tax regime considered. We expect to pay tax on our income in the country where economic activities take place and value is created and believe double taxation of the same activity by different jurisdictions should be avoided.

Tax risk

Shell supports efficient, predictable and stable tax regimes that incentivise long-term investment. We expect the laws to be applied consistently, creating a level playing field for all. However, Shell operates in more than 70 countries that have differing degrees of political, legal, and fiscal stability. This exposes us to a wide range of political developments that could result in changes to contractual terms, laws, and regulations. Developments in politics, laws and regulations can and do affect our operations. Potential impacts include: additional taxes including windfall taxes, restrictions on deductions and retroactive tax claims, changes to regulatory interpretations and enforcement; and changes to disclosure requirements. A prolonged period of lower oil and gas prices could affect the financial, fiscal, legal, political and social stability of countries that rely significantly on oil and gas revenue. This could, in turn, have a material adverse effect on our earnings, cash flows and financial condition.

Shell has a variety of processes for obtaining assurance on the adequacy of tax risk management and internal control and implements a broad array of measures to manage its tax risks. There are also risks that Shell accepts or does not seek to fully mitigate. The Tax Leadership Team regularly considers risks and associated control mechanisms.

Tax Governance

The Shell Board of Directors is responsible for maintaining a sound system of risk management and internal control, and for regularly reviewing its effectiveness. This system also covers taxation, which forms an integral part of the Shell control framework. Annually, the Board conducts a review of the effectiveness of Shell’s system of risk management and internal control, including financial, taxation, operational and compliance controls.

Tax compliant behavior is the standard. It is embedded in the Shell General Business Principles, first published in 1976. More specifically, 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. Shell employees, contract staff and any third party can report any potential breaches of the Code of Conduct confidentially and anonymously through a variety of channels, including the Global Helpline, which is operated by an independent provider.

Assurance on Tax matters is embedded in the Tax Management Framework & Controls. This sets out the objectives, risks, standards and key pillars of control, appraisal and assurance processes that underpin and establish boundaries for Tax activities across the Group. The contents of this document apply to all staff working with Tax matters across Shell whether within the Tax function, other functional areas, or in the Business. It is a key element of the Tax Management Framework & Controls that all staff understand its content and its relevance in their own day-to-day activities.

The Executive Vice President Taxation and Corporate Structure (EVP Tax) is accountable for all Tax matters affecting Shell and for the leadership of the Tax function.


Shell was one of the first energy companies to voluntarily publish revenues that our operations generate through income taxes, royalties and indirect taxes for governments around the world. From 2016 onwards, Shell makes mandatory disclosures under the Reports on Payments to Governments Regulations 2014, and files its Payments to Governments Report with the UK’s Companies House. This report is published on our website www.shell.com/payments.

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 that considers the views of the relevant stakeholders involved, i.e. industry, governments and civil society.

Collaborating with others

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 UK, the Netherlands, and Singapore, and we continue to explore establishing more co-operative compliance relationships in other countries.

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.

Due to the size and complexity of our business there will be occasions where there will be disagreements with tax authorities. Shell aims to resolve such disputes in an amicable fashion, however this will occasionally result in litigation.

Shell may seek the support of an external advisor where specialist technical expertise is required that is not available in-house, or where additional resources are required.

1Cautionary note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. On this webpage “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this webpage refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This webpage contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this webpage, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this webpage are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2017 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this webpage and should be considered by the reader. Each forward-looking statement speaks only as of the date of this webpage, 5 December, 2018. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this webpage.

We may have used certain terms, such as resources, in this webpage that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

Please visit here for the full cautionary note.

More in Sustainability

Shell’s approach to tax

Paying taxes in the countries where we operate is about more than complying with the law. It provides governments with opportunity to generate revenues, support economic growth and enhance social development.

Preventing the facilitation of tax evasion

Shell does not condone, encourage or support tax evasion, and is committed to implementing procedures to prevent anybody employed or contracted to Shell or acting on Shell’s behalf facilitating the evasion of tax.

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