A transparent approach to taxation

We recognise there is a growing interest in the amount of tax paid by multinational companies.  We continue to seek new and improved ways to communicate our tax disclosures and approach, which will be meaningful to our readers and stakeholders.

As with all our other functions, tax within the group operates within a strong governance process.  Our group tax policy guides the way we manage tax affairs across our businesses. We seek to be fully transparent in our tax returns and related disclosures to revenue authorities.

The corporate tax charge for the year was US$1,126 million. This gives us an effective tax rate of 27.5%, down from 28.2% last year due to changes in tax legislation, the resolution of some uncertain tax positions, and some gains as a result of organisational changes, including acquisitions.

Total taxes borne and collected by the group during the year amounted to US$9,400 million (2011: US$8,400 million). This includes excise taxes, transactional taxes and taxes borne by employees as well as our share (based on equity interest) of taxes paid by our US joint venture. We consider this wider calculation to be an important and appropriate indication of the tax contribution of our operations, and the fiscal impact they have on the countries in which we do business. 

Tax receipts are an important source of national revenue and essential for helping developing countries to break out of the aid trap. Of the taxes we pay, 77% go to governments in developing countries and 23% are paid in developed economies. We support steps to improve tax management and administration in developing countries, so that local revenue authorities are well equipped to understand the tax positions of the companies from which they collect revenue.