Tax Transparency

Our business activities generate a substantial amount and variety of taxes. We pay corporate income taxes, royalties, production taxes, stamp duties, and employment and other taxes. In addition, we collect and remit payroll taxes as well as indirect taxes, such as excise duties and VAT. The taxes we collect and pay represent a significant part of our economic contribution to the countries in which we operate.

Specific Policies and Commitments

At OMV, we are committed to complying with tax laws in a responsible manner and to having open and constructive relationships with tax authorities, which is also reflected in OMV’s public Tax Strategy.

Our tax planning supports OMV’s business and reflects our commercial and economic activity. OMV does not engage in aggressive tax planning, which consists of artificial structures put in place merely to save taxes or of transactions lacking economic substance aimed at obtaining undue tax advantages. We comply with applicable tax laws and seek to limit the risk of uncertainty or disputes. We perform transactions between OMV Group companies on an arm’s-length basis and in accordance with currently applicable OECD principles.

OMV Group companies are established in suitable jurisdictions, giving consideration to our business activities and the prevailing regulatory environment. OMV does not establish its subsidiaries in countries that do not follow international standards of transparency and exchange of information on tax matters, unless justified by operational requirements in line with OMV’s business ethics principles and our Code of Conduct. The Global Tax Directive is the key internal guidance document governing taxes within OMV Group.

Management and Due Diligence Processes

Risk Assessments

We continuously carry out risk reviews, which also include tax risks, in order to assess our current and future financial and non-financial risks, assess how these trends will impact OMV, and then develop appropriate responses. We report key risks internally at least twice a year to the Supervisory Board through a very clearly defined process. The Executive Board drives OMV’s commitment to the risk management program and sets the tone for a strong risk culture across the organization.

We follow OMV’s risk management system as part of our internal control processes. We identify, assess, and manage tax risks by implementing risk management measures at the operational level with a robust and complex set of controls and procedures. These guarantee verification of the correctness of the data included in the relevant tax returns, tax payments, and communications with tax authorities in a timely manner. The effectiveness and relevance of these controls and procedures is periodically assessed in order to promptly undertake any necessary mitigation and modifications.

Disclosure

Since 2016, OMV has been providing mandatory disclosures under the Payment to Government Directive (according to Section 267c of the Austrian Commercial Code) and publishes its payments made to governments in connection with exploration and extraction activities, such as production entitlements, taxes, or royalties, in the consolidated financial statements. (For more details, see the Consolidated Report on the Payments Made to Governments in the Annual Report.) In addition, OMV reports payments made to public authorities, such as taxes or royalties in connection with exploration and extraction activities, in countries that are members of the Extractive Industries Transparency Initiative (EITI). We also file a country-by-country report (CbCR) for the OMV Group with the Austrian tax authorities. This is done in accordance with Action 13 of OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan. The CbCR is an annual tax return that breaks down key elements of the financial statements by tax jurisdiction.

Outlook

Taxation as a key steering instrument towards an eco-friendly, green economy plays a major role in the current initiatives of the EU, OECD member states, and the Austrian government.

• The Fit-for-55 package by which the EU aims to reduce its net greenhouse gas emissions by at least 55% by 2030 will have an impact on the taxation of inefficient and polluting fuels, for instance. In 2021, the members of the OECD/G20 inclusive framework agreed on reforming international tax rules by implementing new rules for profit allocation (Pillar One) and establishing a global minimum taxation regime (Pillar Two) effective in 2023.
• In 2021, the European Council, European Parliament, and European Commission reached an agreement on the proposed public country-by-country reporting (CbCR) directive. Considering the 18-month transposition deadline for member states, the public CbCR will enter into force in 2024 for the 2023 fiscal filing year.
• With the adopted eco-social tax reform in Austria, a national CO₂ price will be implemented step-by-step from 2022 onward. The national CO₂ price applies to defined energy carriers according to defined emission factors. As an energy provider, we will be charged a fixed CO₂ price which will be increased annually until 2026, before a market-based system will be put in place. Generally, OMV supports the creation of such economic and socio-political incentives for more climate-friendly behavior, however, favors the creation of an EU-wide harmonized system.