Tax strategy

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.

• 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.

• 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.

• 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).