SEADRILL LIMITED and CONSOLIDATED SUBSIDIARIES (the “Group” or “Seadrill”)
STATEMENT OF TAX STRATEGY AND TAX POLICY
1. The Group’s global tax strategy is to enhance Seadrill Limited’s shareholder value whilst complying with all relevant tax legislation and regulations. The Group will comply with Seadrill’s code of conduct, which governs our behaviours and principles. See attached Tax policy for further details.
2. The Group’s overall tax compliance objective is to fulfil its obligations by filing timely and accurate tax returns and other compliance filings, and making tax payments on time.
3. The Group will operate in a transparent, professional and constructive manner with tax authorities (globally including HM Revenue & Customs in the UK) even if there are differences of opinion on matters within tax returns and make appropriate disclosures on relevant issues.
4. The Group will strive to ensure that commercial transactions are structured in a tax efficient way and arranges its affairs, within the law, to reduce the effect of taxation on the Group and its stakeholders (including shareholders, customers and employees) having considered the impact on our reputation. This may reflect practices commonly operated within the offshore drilling sector.
5. The Board/Executive Team wish to and will be regularly updated on key tax developments, and will review and approve all matters where a material tax impact could arise.
6. The business and regional teams must consult Group Tax regarding all significant business developments which have potential tax implications, and Group Tax will keep the businesses updated on relevant tax developments and issues.
7. The Group will consider whether to and may participate in the tax policy making and consultative processes globally where relevant to our industry or companies.
8. The Board through the Executive Team requires and will ensure that Group Tax has and is able to maintain sufficiently skilled resources to maintain the Tax policy and Tax strategy of the Group.
Published to comply with UK legislation Finance Act 2016 Schedule 19
Updated December 2020
SEADRILL TAX POLICY
This is organized in the following sections:-
1. Statement of intent
2. Tax principles
3. Tax Risk Management
4. Tax Compliance
5. Managing relationships with tax authorities
1. STATEMENT OF INTENT
Seadrill is a large and complex group with a number of companies in different jurisdictions and is a sizeable tax contributor in a number of countries. Seadrill is committed to complying with all relevant tax rules and requirements in all jurisdictions, taking a fair and reasonable approach to tax and operating to a standard consistent with other participants in the sectors in which it operates and also reflecting its listed status on the Norwegian stock exchange.
2. TAX PRINCIPLES
Seadrill has adopted the following set of tax principles. This is our published tax code of conduct to which the whole of the Group is committed to complying.
- Seadrill companies will comply with all applicable tax rules, regulations and disclosure requirements in all territories in which they operate and are organised.
- Seadrill Limited will make decisions in relation to tax giving due regard to its reputation, integrity and status as the parent company of a group, with shares listed on the Oslo Stock Exchange.
- Seadrill will, where it is responsible and appropriate to do so, take steps to reduce its tax liabilities within the laws of the countries in which Group companies operate. This is to reflect practices appropriate and commonly operated within the sector, reflecting the diversity of territories, customer contracts and applicable taxes. It will claim properly available allowances, deductions, reliefs, incentives, exemptions and credits where it is beneficial to do so.
- Seadrill will not engage in abusive tax arrangements.
- External specialist advice will be sought to support a tax position where it is considered appropriate, giving regard to the quantum of tax in issue, the complexity of the relevant rules and the commercial arrangements and circumstances of the issue.
3. TAX RISK MANAGEMENT
- The Group will consider all factors, commercial, technical and reputational when making decisions on tax and will monitor tax risks and report and escalate risks as appropriate.
- The Group will consider the overall governance position and recommend improvements as necessary.
- Tax law changes frequently and the Group will keep up to date on potential changes in legislation or case law and will take action to mitigate potential costs or take advantage of potential benefits of changes. This will involve relevant employees undertaking suitable training.
4. TAX COMPLIANCE
- Seadrill’s approach to tax compliance is to apply a standard of care to its procedures that is consistent with a group that has shares listed on the Oslo Stock Exchange. Seadrill companies will strive to pay all tax due, make all tax filings and disclosures and submit all returns accurately and on time in each territory in which it operates. Documents and records will be retained for the period of time required by relevant tax statute.
- Seadrill companies will properly operate all appropriate tax deductions at source and respect withholding tax rules.
- With regards to cross-border matters, all companies will follow the requirements of domestic tax law, subject to the application of relevant tax treaties. Rules governing transfer pricing and establishing a taxable presence will be respected, with the aim of minimising the impact of double taxation.
- Seadrill companies will account for sales taxes and other transaction taxes and deductions on all relevant income and set out to achieve a fair and reasonable recovery or offset of sales and withholding taxes on costs in all territories.
5. MANAGING RELATIONSHIPS WITH TAX AUTHORITIES
- Group companies will engage with tax authorities in all relevant jurisdictions in an open, constructive and transparent way.
- The Group will engage with tax authorities and other relevant bodies such as the regulators and governments, on tax matters which are important to the group to defend Seadrill’s right to a fair and reasonable tax regime. This will include contributing to consultations and commenting on draft legislation.