Tax reporting

Our tax policy is to:

  • Operate in accordance with the terms of our Code of Conduct
  • Act with integrity in all tax matters
  • Work together with the tax authorities in jurisdictions that we operate in to build positive long-term relationships
  • Where disputes occur, to address them promptly
  • Manage tax in a pro-active manner to maximise value for our clients and shareholders

Management responsibility and oversight for our tax strategy and responsibility and governance over our tax policy, which is approved by the Board and Audit Committee, rests with the Chief Financial Officer and the Global Head of Tax who monitor our tax activities and report regularly to the Board and the Audit Committee. The Group’s tax affairs and the management of tax risk are delegated to a global team of tax professionals.

Making a significant contribution to public finances

Through the taxes we pay, Petrofac makes a significant financial contribution to the public finances of the local economies in which we operate.

In 2016, the total amount paid to governments in tax was US$571 million, comprised of corporate income tax, employment taxes, other forms of tax and social security contributions. 

Bringing more transparency to our tax reporting

Tax transparency remains a priority for governments, regulators and businesses. Many previously announced initiatives have now been formalised, including tax and financial data reporting on a country-by- country basis and disclosure of companies’ tax strategies, governance and risk management. We are supportive of such initiatives and, in many cases, have actively contributed to their development.

In 2016:

  • We made our inaugural disclosures under the EU Transparency Directive, involving country-by-country reporting of tax and non-tax payments made to governments in respect of extractive activities
  • We continued to contribute to the development of business taxation policies and legislation by participating in public consultations
  • We maintained membership of various industry groups that proactively participate in the development of future tax policy and transparency initiatives

Our worldwide contribution to public finances – total taxes paid

The total amount that we pay in taxes is not confined to the corporate income tax disclosed within the financial statements. It also includes:

  • Employee and employer taxes and social security payments
  • VAT and sales taxes
  • Other taxes such as withholding, property and other indirect taxes

The total amount paid by Petrofac to governments worldwide includes those taxes which are borne by Petrofac, as well as taxes collected by Petrofac but which are recoverable from tax authorities or customers and suppliers. VAT and sales taxes are shown on an accruals basis.