When it comes to tax, we follow the transparency standards set out in our Code of Ethics.
Determining a fair amount of taxes due in each jurisdiction in which we operate and minimizing the risks of tax disputes are the purposes of Eni’s tax strategy.
Our businesses give us the opportunity to make a significant contribution to tax revenues in many jurisdictions, so contributing to economic and social development of the countries in which we operate. As well as taxes on profits, our activities are subject to other forms of taxation, such as royalties on extraction of hydrocarbons, excise duties on production and consumption, turnover taxes such as VAT, payroll taxes, local taxes and other minor taxes. Eni is aware of the importance of such revenue flows for collective wellbeing and therefore adopts a behaviour that is in line with the principles of transparency, honesty, integrity and good faith prescribed in its Ethical Code. The primary objective of this Tax Strategy approved by Eni’s Board on 24th of May 2018 is to ensure payment of taxes in the various countries in which Eni operates, in accordance not only with the letter but also the spirit of applicable laws.
Our management decisions are driven by industrial and commercial objectives, and tax considerations are only relevant as a support to the realisation of those objectives. Eni wishes to reduce tax risk to a minimum and, to this purpose, we have specific controls aimed at ensuring accuracy and timeliness of settlement and payment of taxes, in the context of transparent and accurate compliance aimed also at the prevention of possible disputes. To this purpose Eni encourages prior consultation with tax authorities, and the use of statutory procedures in place for that purpose. Our subsidiaries engaged in exploration, development and production of hydrocarbons pay taxes on profits from Oil & Gas activities in the countries where the reserves are located, and in line with contractual and tax rules there applicable. Eni does not operate in such a way as to facilitate tax evasion by persons acting on its behalf.
According to Italian Law n. 208/2015, Eni is subject to the requirement of drafting the Country‐by‐Country Report "(CbC Report) expected by Action 13 of the “Base erosion and profit shifting ‐ BEPS” project, developed by the OECD with the G20’s support to contrast ”the erosion of the tax base and the transfer of profits" by multinational companies.
The CbC report is a data collection related to the turnover, profits and aggregate taxes with respect to the jurisdictions in which Eni carries out its business activities. The CbC Report is a tool for assessing the fiscal risk and is transmitted by the Italian Financial Administration to all Financial Administrations with which there is an agreement for the mutual exchange of information.
Although there is no obligation to disseminate this information to the market and the public, Eni, in order to maximize its transparency in the fiscal field, publishes the CbC Report.
i) Assessment of tax risks
ii) Identification and valuation of controls to manage those risks
iii) Related reporting.
The Tax Management System Guideline defines the rules and methodology to design and set up the Tax Control Framework and to maintain it over time.