Introduction to country-by-country reporting

In this report, we disclose our country-by-country report (CbCR) data for 98 of the 99 countries and locations in which we have a taxable presence. Where country-by country report data are not available for this report, we have provided information from our Payments to Governments Report [A]. 

Our Payments to Governments Report also discloses other forms of payments. These include production entitlements, royalties, fees and bonus payments. Where made, these payments have been referenced under each applicable country.

We share more information about our presence and purpose in each country and location, as well as relevant financial data which help determine Shell’s overall tax and economic contribution.

The OECD developed and implemented CbCR in 2017 and all large multinational enterprises are required to file these statements with tax authorities. 

The nature of our business varies and we can have more than one kind of activity wherever we are present. Under OECD rules, CbCR is prepared using aggregated financial data. It is therefore not always possible to draw conclusions about a single entity, business or venture.

This report shows aggregated country data for entities that are consolidated or proportionally consolidated in the 2019 Annual Report and Accounts. We also include data for the Shell share of non-consolidated joint ventures and associates. This data is reported in the country where the entity holding the shares is based.

Shell uses International Financial Reporting Standards (IFRS) data and US dollars as the reporting currency in its CbCR. The main data source is the consolidated Group reporting system, but reliance is also placed on data from local accounting systems for specific items.

The financial information taken from our consolidated Group reporting system has been prepared under Shell's general financial controls. CbCR reports are not subject to an external audit, statement or opinion.

CBCR Definitions

The OECD requires certain data to be included in CbCR. See below for definitions of the key country-by-country reporting terms.

Revenues

Revenues are disclosed as a split between those from related-parties and those from unrelated parties. For CbCR, unrelated parties would include non-consolidated joint ventures and associates for the purposes of our 2019 Annual Report and Accounts.

Unrelated-party revenues include sales of products, interest income, dividend income and other income. Related-party revenues include transactions between consolidated Group entities. An example of related-party revenues would be where our Trading organisation buys oil or gas from our Upstream organisation and sells it to our Downstream organisation.

Within one country or location, many of these related party transactions may occur, as Shell entities buy and sell goods, or provide and receive services, to or from each other. Shell includes all these transactions in our aggregated CbCR data. For example, feedstock could be sold to a refinery, refined and then processed further in a chemical plant before being traded by Shell. This can occur within one country or location. In this case, each of these sales between different entities would be counted as related-party revenues. These can represent large amounts.

Profit before tax

Profit or loss before tax is reported in Shell’s Consolidated Statement of Income. Any share of profit or loss from non-consolidated joint ventures and associates is reported under the country where the entity holding the shares is based.

This is the profit or loss calculated using group accounting policies. Local statutory accounts may need to comply with local accounting standards which may be different. The local statutory accounting profit or loss is the basis for the calculation of taxable profits in individual countries or locations. Local tax laws are then applied to the profit or loss.

Profit before tax shows the group accounting result but not the profits subject to tax after compliance with local tax laws.

Tax paid

This includes corporate income tax paid in 2019. In some cases, this may include payments made in relation to previous years as tax payments are often made in arrears. It also includes withholding tax accrued.

Tax accrued

This is the amount of corporate income tax for 2019 recorded as current-year tax in Shell’s Consolidated Statement of Income. This also includes withholding tax accrued. It does not include prior-year adjustments, deferred tax or provisions for uncertain tax liabilities.

Stated capital

This information is sourced from local statutory accounts and is the amount of money invested in return for shares.

The OECD rules require aggregated data, including for stated capital. This means that when a holding company invests in a subsidiary, which then invests in another subsidiary, all within the same country, each of those investments is counted and aggregated.

Accumulated earnings

Accumulated earnings reflect the profits retained and not used for any other purpose, such as to pay dividends to shareholders.

Number of employees

This is the average number of employees in the year, including permanent and temporary staff on long-term contracts. Some of our businesses are labour-intensive. Others, such as holding companies which hold shares in subsidiaries or joint ventures, are not.

Tangible assets

The data reported in line with CbCR comprises property, plant and equipment and inventories as at the closing balance sheet date on December 31, 2019. In 2019, Shell implemented International Financial Reporting Standard 16 Leases, which categorises some leases as assets on the balance sheet.

[A] See Our tax data

[A] See page 82