Offshore Energies UK comments on Shell profits announcement, new windfall taxes

Offshore Energies UK February 02, 2023

(WO) — Reuters and others have reported calls by Labor politicians for another increase in the windfall taxes on energy companies, linked to Shell’s latest global profits announcements.

Offshore Energies UK, the trade body for the UK’s offshore energy industries and supply chain companies, said calls by politicians to impose UK windfall taxes on companies’ global profits risked misleading voters and consumers — because such a levy would breach global tax agreements and so could never be implemented.

Mike Tholen, OEUK’s director of sustainability, said it was wrong to offer false hopes to hard-pressed consumers. “These calls for extra windfall taxes on profits made outside the UK make no sense and could never be implemented. The UK is subject to global tax agreements which say that it cannot tax profits made by companies outside of the UK.

“Multinationals like Shell and BP are not single companies but groups with multiple overseas subsidiaries - so most of their profits are made abroad. Subsidiaries based in other countries will pay taxes – but in those countries. The UK cannot then impose a second tax just because the group has its headquarters in the UK. If we did, they would all leave.

“We already have a 75% windfall tax on profits made in the UK - the highest for any industry.

"It would be invidious for the UK to tax profits made in other countries too. The taxes on those revenues belong to the countries where they were generated. It would be wrong for another country’s revenues to be effectively seized by the UK.

“Our leading politicians in all parties know very well how global tax law works and we would call on them to avoid these misrepresentations.” 

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