Petrofac’s tax strategy is to comply with applicable laws and regulations in the countries in which it operates, mitigate its tax risks and seek to enhance and protect its reputation and shareholder value. It does this through the application of its Tax Policy, which is approved by the Petrofac Limited Board and implemented at a Group and divisional level through a Tax Governance Standard. The tax strategy is delivered with integrity, in accordance with the Petrofac Code of Conduct.
Our tax policy is to:
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.
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.
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.
The total amount that we pay in taxes is not confined to the corporate income tax disclosed within the financial statements. It also includes:
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.