Shell expects to pay a total of nearly $2.4 billion (€2.3 billion) in windfall levies in the European Union and the UK for 2022, meaning it will pay UK tax for the first time since 2017.
The oil major said on Friday that it expected to pay an additional $2 billion in taxes following changes introduced in the EU and the UK since September to capture some of the windfall profits oil and gas companies have been making from high commodity prices.
This $2 billion would be on top of $360 million in expected windfall tax charges Shell had already disclosed to investors, bringing the total to nearly $2.4 billion.
The disclosure, made in a fourth-quarter trading statement released on Friday, means the oil company will pay tax in the UK for the first time in five years. In recent years the company has received tax refunds on investments made in the UK North Sea and decommissioning activities, which have been higher than any tax owed.
Shell’s former chief executive Ben van Beurden in October appeared to invite governments to increase windfall taxes on the company, when he argued the industry should “embrace” higher taxes to support households that were bearing the brunt of high commodity prices.
The UK subsequently raised its windfall tax – known as the energy profits levy and initially introduced in April – by 10 percentage points in November, taking the aggregate headline tax rate on oil and gas producers to 75 per cent.
The European Commission expects to raise a total of €25 billion from the bloc’s own windfall tax – the so-called solidarity contribution – but the policy is facing a legal challenge from US oil major ExxonMobil. – Copyright The Financial Times Limited 2023
