Petrofac’s tax strategy is to:
We do this through the application of our Tax Policy, which is approved by the Petrofac Limited Board and implemented at a Group and divisional level through a Tax Governance Standard. Our tax strategy is delivered with integrity, in accordance with Petrofac's Code of Conduct.
Through the taxes we pay, Petrofac makes a significant financial contribution to the public finances of the local economies in which we operate.
In 2017, the total amount paid to governments in tax was US$422 million, comprising corporate income tax, employment taxes, other forms of tax and social security contributions.
Decreases in total taxes paid have largely resulted from material projects reaching completion in jurisdictions which operated VAT regimes in the reporting period.
Ensuring tax compliance and increasing tax transparency continue to be priorities for governments, regulators and businesses.
During 2017, several new compliance and reporting obligations affecting our business came into force. We monitor regional and global best practice, maintain membership of industry groups and follow and provide input into tax policy development.
In 2017, we:
The total amount that we pay in taxes is not limited 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.