In accordance with Part 2 of Schedule 19 Finance Act 2016, the following UK tax strategy applies to all UK tax resident companies and permanent establishments of the Exxon Mobil Group. The worldwide parent, Exxon Mobil Corporation, is a US incorporated company and the group is a multinational enterprise (MNE) under OECD guidelines.
ExxonMobil affiliates (“EM”) have a long-established business presence in the UK with substantial interests in the upstream and downstream oil, gas and petrochemicals sectors. The UK subsidiaries and permanent establishments are members of a global group under the ultimate ownership of Exxon Mobil Corporation.
EM in the UK is responsible for fulfilling its obligations to HMRC for both direct and indirect taxes and duties, including Corporation Tax, Petroleum Revenue Tax, employment taxes, VAT and Excise Duty.
Approach of the group to risk management and governance arrangements in relation to UK taxation
EM’s worldwide approach to tax matters includes filing all tax returns accurately and timely. To ensure compliance, EM operates globally with a high level of focus on internal controls processes which are used to identify, assess, monitor and manage risk (including tax risk) across all of its businesses and there is an expectation of strict adherence to these systems by all EM personnel.
Ultimately the responsibility for EM’s UK tax strategy and compliance rests with the Boards of Directors of the relevant subsidiaries with UK operations. For tax matters excluding employment taxes and customs duties, executive management is delegated to the UK Tax Manager. Employment taxes are the responsibility of HR management and customs duties are the responsibility of the relevant business line incurring such levies.
The UK Tax Manager heads up a highly qualified team of managers and advisers who have clearly defined roles and responsibilities. In addition, the UK Tax Department works closely with a shared business support centre in Budapest, Hungary which provides tax reporting and compliance support. UK Tax Department staff work with the business lines to ensure that any commercial changes or new transactions are well understood, and any tax risks identified are managed as appropriate.
The UK Tax Manager reports to the UK Business Services Manager and meets with the Boards of the UK operating companies to discuss the work being performed by the department, including updating them on any relevant legislative changes and answering questions they may have on tax matters.
The UK Tax Department also conducts an annual Senior Accounting Office (SAO) compliance review following which the UK Business Services Manager, the SAO for the EM UK group, will report to HMRC on the effectiveness of controls in place.
Attitude of the group towards UK tax planning
EM believes that the way it conducts its business is as important as its results and expects directors, officers, employees and suppliers acting on EM’s behalf to observe the highest standards of ethics. It is also EM’s absolute requirement that its activities comply with all applicable laws – including tax laws. EM has long recognised the importance and value of business integrity. It is enshrined in the policies and in the guiding principles for how the business is run. Personnel are also expected to adhere to the EM Standards of Business Conduct which can be found here: Standards of Business Conduct
Tax work is driven by commercial and economic activity within the business lines and the UK Tax Department’s role is to advise on business transactions based on commercial needs as appropriate. The UK Tax Department seeks external professional advice on an ad-hoc basis where the tax interpretation of legislation may be uncertain or if the law is particularly complex to apply. Where appropriate, HMRC clearances and rulings are sought in advance of transactions in order to gain certainty on the applicable tax treatment.
It is also the Tax Department’s responsibility to EM’s shareholders to make use of any relevant tax incentives and exemptions provided by the UK Government.
Level of risk in relation to UK taxation that the group is prepared to accept
Tax risk management controls are in place and reviewed periodically as required under global controls processes in order to ensure full compliance with statutory and internal requirements.
The UK Tax Department seeks to minimise tax risk by following the approach discussed in detail above.
Approach of the group towards its dealings with HMRC
EM files its tax returns and pays the taxes due in a timely and accurate manner. Any inadvertent errors in submissions are fully disclosed to HMRC as soon as practical after they are identified.
EM pro-actively engages with Government on all aspects of taxation and has a professional, open and honest relationship with HMRC; meeting with them on a regular basis to discuss any material changes of which HMRC should be aware. EM is committed to providing real time information where appropriate with the goal of closing out any questions on fact or interpretation of the law as efficiently as possible.
This tax strategy is consistent with the wider EM business strategy, and aligned with the business objectives of EM affiliates. EM regards the publication of this document as complying with the duty under Schedule 19 of the Finance Act 2016 to publish its tax strategy in the current financial year.
UK Tax Manager Published: December 2017