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Responsible tax policy

Tax strategy

  • The GRI-207 global tax standard has been validated by our account auditors

Our tax strategy

We are committed to managing our tax affairs by applying good tax practices and acting transparently, efficiently and responsibly paying taxes, and promoting cooperative relations with governments, while avoiding significant risks and unnecessary disputes.

Our tax strategy is based on five fundamental principles:

Responsible
Compliance

Tax
Efficiency

Cooperative
Relations

Prevention of
Tax Risks

Transparency

Since our Corporate Tax Policy was approved by the Board of Directors, multiple actions have been taken that are directly inspired by the five principles outlined in this Policy and that reflect the Group's compliance with them.

1. We are aware of our responsibility in the sustainable economic development of the societies in which we operate and that the taxes we pay represent a significant part of their economies. 

For this reason, we are committed to the responsible payment of taxes in the countries in which we operate, applying the following action principles:

  • We comply with the law, respecting both the letter and spirit of the law.
  • We apply the “arms length” principle in our intra-group transactions.
  • We adopt our tax positions based on solid economic or business reasons or on commonly accepted practices, avoiding abusive tax planning schemes or practices.
  • We provide true, complete information on our transactions.
  • We prioritize non-litigious means of resolving conflicts when possible and the possibilities offered by legal procedures to strengthen agreements with administrations.
  • Some examples to demonstrate our tax efficiency and defense of the Company’s interests:

- Complying with the Spanish Code of Good Tax Practices. 

- Abstaining from the use of contrived corporate structures in tax havens.

- Internal procedure for setting transfer prices with value creation and the arm’s length principle. 

- Internal control processes, regulations, and a whistleblowing channel to ensure compliance with our tax obligations.

- An adequate organizational structure and the means to comply with our tax obligations.

- Professional team undergoing continuous training, subject to a common compensation policy and with a contingency plan for key positions.

2. We reconcile responsible compliance with our tax obligations with the commitment to create value for our shareholders.
We do this through efficient management of tax payments and benefits, keeping in mind the Company's global interests and anticipating significant tax risks.
  • Some examples to demonstrate our tax efficiency and defense of the company’s interests:

- Tax planning aligned with the business and aimed at legitimate optimization.

- Corporate structure aligned with the business and adapted to legal requirements and corporate governance standards.

- Applying tax breaks accessible to all economic players (deductions for research, development, and innovation; freedom to amortize; capitalization of reserves, etc.).

- Supporting publishing the tax incentives in oil contracts from authorities and governments.

3. We are committed to building relationships with tax authorities 
These relationships are based on the principles of trust, good faith, professionalism, collaboration, loyalty, and a search for mutual understanding based on reciprocity to facilitate the application of the tax system, increase legal security, and reduce disputes.
  • Some examples to demonstrate our tax efficiency and defense of the company’s interests:

- Voluntarily presenting our 2015, 2016, and 2017 Tax Transparency Reports to the Spanish Tax Agency. 

- Participating in employment forums in cooperation with public administrations (Spain, Canada, Portugal, Singapore, United Kingdom, the Netherlands).

- Voluntarily participating in the OECD's pilot program “International Compliance Assurance Programme” (ICAP). 

- Collaborating with international organizations (OECD, UN, and EU).

- Being certified as an Authorized Economic Operator in the EU and Peru.

4. We apply responsible tax policies that enable us to prevent conduct that could generate significant tax risks. 
We frame the management of these risks within our global risk management policy in order to mitigate or eliminate them, and we ensure the defense of the legitimate interests of the Company if we must assume said risks in the event that common understanding with the tax administration is not possible.
  • Some examples to demonstrate our tax efficiency and defense of the company’s interests:

- Tax Control Framework compliant with the best standards and validated by an independent expert. 

- Incorporating tax risks into the Group’s core risk management system.

- Approval of the Corporate Tax Policy by the Board of Directors, which shall monitor enforcement of the strategy and tax risk management at least once a year.

- Concluding mutual procedures and agreements with tax administrations regarding a range of matters.

5. We are committed to transparency being the basis of our actions in exercising tax functions and we endeavor to:

  • Not use opaque or contrived corporate structures to hide or reduce the transparency of our activities.
  • Not operate in tax havens unless it is necessary for business reasons.
  • Comply with the best external reporting standards on tax policy in order to facilitate understanding of our tax contributions and tax policies.
  • Some examples to demonstrate our tax efficiency and defense of the company’s interests:

- Leaders in Spain in terms of transparency and responsible tax affairs according to studies carried out by various social analysis opinion panels.

- Corporate structure aligned with the business and adapted to legal requirements and corporate governance standards.

- Remove inactive companies from the company structure.

- Incorporating tax-related objectives into Repsol’s Global Sustainability Plan. 

- Participating in Tax Responsible Principles defined by the B-Team, which ranked as "one of the most radically transparent companies." 

- Active dialogue with NGOs. 

- Publishing our Country-by-Country Report (CbC).