Ethics and transparency

Ética y transparencia
 

At Repsol we have procedures and a global action framework to ensure the fulfillment of all our obligations, both internal and external, and in all regulatory environments.

We have a Code of Ethics and Conduct applicable to all directors, executives, and employees, where the reference framework is established to understand and put in practice the behaviors and expectations deposited in each person, based on the Group's values.

In 2017 we implemented a specific training program in relation to the Code of Ethics and Conduct aimed at all employees, which is available on www.repsol.com.

Likewise, we have an Ethics and Compliance Channel administrated by an external supplier which allows employees and third parties to make consultations and report possible breaches of the Code of Ethics and Conduct and the Crime Prevention Model. This channel is accessible 24 hours a day, 7 days a week.

In order to prevent corruption and bribery, through our Anti-Corruption Policy we undertake to carry out all our activities in accordance with the legislation in every country and area in which we operate, rejecting all forms of corruption.

To this end, we have a “Crime Prevention Model” norm and an “Internal Investigation” procedure, through which the prevention model and mechanisms for responding to possible illicit conducts are structured.

In 2017, in order to supplement the current regulations and improve their dissemination and understanding, a Crime Prevention Manual was prepared to explain prohibited conducts and what Repsol expected from all its employees.

The Ethics and Compliance Commission has the objective of managing the surveillance and compliance system of the Code of Ethics and Conduct, to which end it constitutes Repsol's Crime Prevention Body, to ensure compliance with the Crime Prevention Model.

Responsible tax policy

Repsol is aware of its responsibility in the sustainable economic development of the companies where it is present and the taxes it pays represent a significant part of its economic contribution thereto. Therefore, Repsol is committed to the responsible payment of taxes in those countries where it carries out its activities.

Our tax policy is aligned with the Company's mission and values, in addition to the long-term strategy of its businesses. The objective is to be publicly recognized as a comprehensive and transparent company in relation to tax matters.

Our Tax Policy is mandatory for all the Group's employees and companies. Since its approval by the Board of Directors of Repsol, S.A., we have implemented multiple actions inspired in its five principles: responsible compliance, tax efficiency and defense of social interests, prevention of significant tax risks, transparency, and cooperative relationships.

Repsol is subject to different income taxes in the territories where it operates. The tax rates that apply to results obtained in hydrocarbon production (Upstream) are usually higher than the general tax rates. At times, those profits are taxed not only in the country where they are obtained, but also in the country where the operating companies or their matrices are headquartered, and may also include cases of double taxation.

Additionally, Repsol is subject to other taxes, such as taxes on hydrocarbon production (royalties and similar), local taxes, taxes on employment and social contributions, etc.

In 2017, Repsol paid €11.979 billion in taxes and similar public charges in more than 40 countries. The total tax burden represents 53.5%1 of the Group's net results (before income tax). Overall, more than 54,000 tax returns were filed.

Also worthy of note are the efforts made in terms of corporate simplification in 2017. Significant milestones were achieved in this sphere including, namely, the net reduction (6%) in the number of Group companies, which undoubtedly makes it possible to advance in Repsol's objective to maintain a simple, transparent, and easily manageable corporate structure.

Lastly, we must recall that Repsol has a specific section on its corporate website, accessible on www.repsol.com, which includes relevant information on the Group's tax matters (among others, the principles that guide its Tax Policy and evidences of compliance therewith, the contribution and tax impact of the activities carried out, with a breakdown of the taxes paid by Repsol in each country, in addition to the references made to international presence and initiatives in terms of corporate simplification implemented during the year).

1 On the Group's net earnings. The total tax burden includes income tax plus the taxes and contributions applicable to operational results.