Why TotalEnergies didn’t pay corporation tax for 2021 (however will pay for 2022)

After the oil firm introduced its newest outcomes, left-wing opponents referred to as for a tax on super-profits, recalling that TotalEnergies paid little or no company tax in France.

The figures are staggering: $10.6 billion in web revenue within the first 6 months of 2022 Thanks to this primary half, TotalEnergies is on monitor to surpass the outcomes of 2021 this yr (16 billion in revenue).

That’s sufficient to reignite the controversy over super-profits by vitality teams, with left-wing opponents accused of making the most of the disaster to hoard large earnings. If Economy Minister Bruno Le Maire closes the door to this risk once more, throughout a press convention on Friday, the query of taxing vitality teams, particularly TotalEnergy, stays alive.

Especially since French teams hardly ever pay company tax in France. For instance, it was not in its 2019 monetary yr, nor in its 2020 monetary yr, nor in its 2021 monetary yr.

The non-profit third sector

How is that this attainable? Because tanker operations in France usually are not worthwhile sufficient. Specifically, the oil firm’s margins are largely generated by the extraction and sale of oil, and TotalEnergies pays the very best taxes within the nations that produce it. In its “Tax Transparency 2019-2020” report, the group exhibits, for instance, 500 million {dollars} in Angola, 616 million in Nigeria, 500 million in Norway…

On the opposite hand, actions in France are above the tertiary stage (group headquarters, analysis and growth facilities, and many others.) that generate little or no profitability.

Another very seen exercise is the service station. The group has round 3,300 individuals in France, largely franchisees. But right here once more, the transfer shouldn’t be actually a godsend for the group as service stations, which have been very aggressive with aggressive hypermarkets for a number of a long time, have decreased their margins on gasoline.

This is nothing new and different historic oil corporations similar to BP and Esso have offered their distribution companies (together with permission to make use of their names) for lack of revenue.

For TotalEnergies, not even with these operations can it generate a cushty revenue.

Purification Roar

Finally, there are refining actions. TotalEnergy has 5 refineries in France and right here once more, the exercise was thought-about unprofitable in recent times. In 2021, refining margins have been round $10 per tonne of oil, not sufficient to make a money cow…

This is why TotalEnergies has not paid corporation tax in France in recent times, even when solely by wanting on the detailed accounts in France (not communicated by the group) it might be attainable to know which operations are nonetheless considerably worthwhile and which aren’t even in deficit.

One factor is for positive, this could change for 2022 as refining margins explode. Gross margin per ton of oil reached $146 in June!

“It is probably going that the outcomes of our operations in France will be worthwhile this yr and due to this fact our firm will pay company tax on its 2022 outcomes,” indicated TotalEnergies in a publish revealed on LinkedIn this Friday.

Contacted by BFM Business, the group additionally famous that in 2021 it paid round 1.9 billion euros in taxes, duties and social safety contributions in France.

In element, 1 billion euros of social and employer contributions, 500 million euros of deferred tax on dividends paid to overseas shareholders and 850 million euros embrace numerous taxes similar to social packages, native taxes or social solidarity contributions of corporations.

Globally, the group introduced that it paid $6.2 billion in taxes in 2020 and $16 billion in 2021.

Thomas Le Roy Journalist BFM enterprise

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