3.8Company Tax Policy
SBM Offshore’s tax policy is summarized as follows:
- The Company aims to be a good corporate citizen in the countries it operates in, by complying with the law and by contributing to the country’s progress and prosperity through employment, training and development, local spending, and through payment of the various taxes it is subject to, including wage tax, personal income tax, withholding tax, sales tax and other state and national taxes as appropriate
- The Company aims to be tax efficient in order to be cost competitive, while fully complying with local and international tax laws
The Company operates in a global context, with competitors, clients, suppliers and a workforce based around the world. A typicalproject sees a hull conversion in Asia, topsides construction in Asia, Africa and South America, engineering in Europe, Asia or the USA and large scale procurement from dozens of companies in as many countries across the globe. In each of these countries the Company complies with local regulations and pays direct and indirect taxes on local value added, labor and profits and in some cases pays a revenue based tax. To coordinate the international nature of its operations and its value flows and to consolidate its global activities, the Company created in 1969 ‘Single Buoy Moorings Inc’, which continues to perform this function today from its offices in Marly, Switzerland.
- complies with the transfer pricing guidelines
- has reviewed the final releases from the project and Company practices are in line with the outcome. In parallel, the Company has welcomed the 2016 European Union Anti-Avoidance Directive implementing some of the Base Erosion and Profit Shifting deliverables throughout the European Union. In respect of country-by-country reporting and transfer pricing documentation, the Company has already taken actions to comply with requirements that have been implemented in the Dutch tax law and the Company will be fully ready to deploy it according to applicable regulations
- makes use of the availability of international tax treaties to avoid double taxation
- does not use intellectual property as a means to shift profits, nor does it use digital sales. Furthermore, the Company does not apply aggressive intra-company financing structures such as hybrids. The Company treats tax as a cost, which needs to be managed and optimized in order to compete effectively in the global competitive arena. In 2016, the Company had a current corporate income tax charge of US$ 5.34 million (compared to US$ 32.25 million in 2015). Due to the large losses incurred on the legacy projects and the current industry downturn, significant tax loss carry forward positions exist at the global contracting company, which are limiting the current tax payments in Switzerland and in jurisdictions of the Regional Centers.