Tax

SHV is committed to achieving the highest standards of Ethics and Integrity. In line with this commitment, SHV believes its obligation as a responsible taxpayer is to pay the amount of taxes legally due in any territory, in accordance with rules set by governments. We believe that taxes are vital to fund the public services and infrastructure that are critical to societies. SHV and its Groups contribute by paying direct and indirect taxes, and by collecting taxes from employees and customers on behalf of governments. That is also one of the reasons why SHV endorses the Tax Governance Code issued by the Confederation of Netherlands Industry and Employers (VNO-NCW). We have updated our tax strategy to align it with the tax principles of the Tax Governance Code. The Tax Governance Code requires companies to be open about their tax payments, so that people can understand how much is paid, where and why. SHV supports this as transparency can build trust. It is about putting the numbers into context, but also about demonstrating the commitment to comply with legislation and explaining a company’s approach to tax. SHV is currently performing a gap analysis to get a clear overview what is needed to comply with the transparency initiatives of the Code.

SHV uses business structures that are aligned with business activities and that are only driven by commercial considerations. SHV only makes use of tax incentives where they are aligned with business activities and operational objectives, generally available to all market participants and specified by law. As such, tax always follows the business.

SHV pays tax on profits according to where value is created within the normal course of its business activities. SHV does not use aggressive tax planning strategies or tax havens to minimise its tax burden. The transfer pricing of intercompany transactions is done in accordance with the arm’s length principle developed by the OECD and is applied consistently.

SHV maintains an open and constructive dialogue with tax authorities based on transparency and trust. SHV engages with them with honesty, integrity and respect.

SHV and its Groups have more than 700 legal entities in 79 countries. Each year, SHV files a so-called country-by-country report with the Dutch tax authorities containing high-level data on the global allocation of income and taxes, and certain other measures of economic activity for all companies over which SHV has management control. The Dutch tax authorities exchange this information with other tax authorities around the world.

SHV provides an overview of the total corporate income tax expenses and corporate income tax payments in 2022 to tax authorities in the ten countries where SHV has the largest presence. These 10 countries represent around two-third of the business.

For each country SHV reports the earnings before tax, the corporate income tax expense in the income statement as well as the amount of corporate income tax paid and received on a cash basis. The tax expense reported in the income statement is the amount of current and deferred tax expense incurred in this financial year based on accounting rules. The tax paid means the net amount of corporate income tax actually paid to or received from the tax authorities in this year.

The following table specifies the net sales (before elimination of intercompany sales), earnings before tax, income tax expense and income tax paid in 2022 for the top 10 countries. In this table, tax expenses are presented as negative amounts (income as positive amounts) and tax payments are presented as negative amounts (refunds as positive amounts). The data shown in the table on the next page is derived from internal management information systems. Net sales in France are mainly generated by SHV Energy Supply & Risk Management, of which a significant part is intercompany sales.

Note: net sales represent sales on a country level and are reported on a non-consolidated basis.

The 2022 effective tax rate increased from 21.4% to 43.4%. The effective income tax impact for this year mainly relates to higher taxes on income from investments in affiliates related to the result of ONE-Dyas, a Dutch based company, which was subject to additional tax levies in the oil & gas industry.