The Role of Switzerland in Shell's Corporate Structure and Tax Planning

The aim of this report is to highlight how Royal Dutch Shell uses its presence in Switzerland, a notorious tax haven and secrecy jurisdiction, to minimize its tax payments in other countries, including developing countries. At least since 2001, Shell may have been using Switzerland for tax purposes. In 2005 for example, the company shifted ownership of its brands and trade marks to a Swiss-based subsidiary, Shell Brands International AG. Research conducted for this report indicates that Shell has eight subsidiaries in Switzerland, most of which are not involved in productive activities. The main purpose of these entities is trademark management, financial services, internal insurance, and trading activities for Shells worldwide oil and gas operations. Shells presence in Switzerland potentially allows the company to avoid paying a significant amount of taxes in developing countries because Shell is able to exploit the specific advantages of the Swiss fiscal system to lower its profits in developing countries, leading to lower tax payments there. The report concludes by making recommendations to Shell, including that the company should implement full country-by-country reporting, to live up to their claims of leadership in tax transparency. Policy recommendations are also made to the Swiss Government and to the European Union to end the facilitation of aggressive tax avoidance by multinational corporations.

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