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Financial transparency

During the year we supported the EITI incorporation process in Peru, actively participating in all the meetings called by the National Work Committee of the EITI initiative.

Repsol and the EITI initiative

Repsol supports transparency and stands opposed to any kind of corruption. The company has been a member of the Extractive Industries Transparency Initiative (EITI) from its inception in 2003. The EITI is the global initiative that we consider best placed to achieve the goal of increasing revenue transparency within the context of respect for contracts and the law. Repsol YPF supports EITI since it was launched and participates in its initiatives to spread good practice.

In 2011, we paid 16,387 million euros in taxes to the governments of the countries where we operate.

EITI brings together governments, international bodies, state and private companies, investors and social stakeholders in a multilateral and voluntary platform. This is a process that begins when a government formally commits to the EITI principles and criteria and leads a working group with the participation of the industry and stakeholders. The group has a period of two years to agree the legislative and contractual changes necessary to issue a report of taxes paid and collected, which must be validated by an independent third party.

In 2011, Repsol supported the process of joining EITI in Peru. On December 14, 2010, the Board of the Extractive Industries Transparency Initiative (EITI) granted Peru six months, to June 12, 2011, to complete the corrective actions necessary to achieve EITI compliant country status.

On June 11, 2011, Peru submitted to the International Secretariat of the EITI the documents required by the Executive Board to complete the validation process. On February 15, 2012 the EITI Board granted Peru compliant country status, making it the first Latin American country where Repsol operates to achieve this status.

During 2011 we played an active role in supporting this validation process. We participated in the four working meetings called by the EITI Initiative National Working Committee in Peru, which dealt with:

  • Management of the approval of the Supreme Decree that extends the functions of the EITI Initiative National Working Committee in Peru
  • Approval of the terms of reference of the second National Conciliation Study for the years 2008-2010
  • Preparation and financing of the second National Conciliation Study.

During 2011, the second National Conciliation Study was drafted for the years 2008-2010, with the participation of 51 companies and it was published in January 2012

Taxes paid to governments

We are concerned for the welfare of the people in certain countries rich in natural resources who may not be fully enjoying the benefits of the wealth we generate. Increased transparency could help alleviate this situation.

Following requests from some society organizations, in 2011 we agreed to publish, for the first time, our taxes paid in 2010, broken down by country.

In 2011, the taxes paid by Repsol84 came to €16,387 million, of which approximately 23% (€3,815 million) were taxes paid (Corporate Income Tax and others related to hydrocarbon production) and 77% (€12,572 million) were taxes withheld or passed on to third parties (such as withholdings on salaries, VAT or taxes on fuel consumption).

Taxes paid by country (€ million)
  2010 2011
Spain 7,930 8,310
Argentina 4,477 4,825
Brazil 518 78
Italy 301 299
Libya 584 120
Peru 594 711
Portugal 1,043 1,132
Trinidad and Tobago 455 522
Venezuela 103 196
Other countries (85) 163 194
Total 16,168 16,387

The 2010 and 2011 Brazil figures are not comparable as in December 2010 Repsol YPF sold its 30% stake in Alberto Pasqualini Refap. S.A. (Refap).

Adherence to the Code of Best Tax Practices

As part of our commitment to transparency, in November 2010 Repsol signed the Code of Best Tax Practices, produced by the Large Business Forum and the Spanish Tax Agency. The aim of this initiative, promoted by the Spanish Government, is to encourage transparency, good faith and cooperation with the Spanish Tax Agency (AEAT) in business tax practices and legal security in the application and interpretation of tax regulations.

Subsidies received

Subsidies recorded in our balance sheet, which stood at €118 million and €110 million in 2011 and 2010 respectively, related primarily to the construction of gas or electricity infrastructure (€64 million in 2011 and €80 million in 2010). Meanwhile, operating subsidies stood at €72 million and €227 million in 2011 and 2010, respectively.

Lawsuits arising from anti-competitive practices

No company in the Repsol YPF Group faced sanction procedures initiated in 2011 due to allegations of anti-competitive practices (excluding YPF).

(84) Excluding Gas Natural Fenosa.
(85) Includes taxes of less than €100 million paid in other countries where the Repsol Group operates.