TotalEnergies will pay 30 billion dollars in taxes and levies on production worldwide in 2022, its CEO Patrick Pouyanné announced on Wednesday, denying that he had things “to hide” during his hearing at the National Assembly on the “super-profits” of the oil and gas companies in particular. The hydrocarbon giant had paid six billion in taxes and production taxes in 2020 and 16 billion in 2021.
Loss-making French activities in 2021
For France, TotalEnergies pays between “1.6 and 1.9 billion euros per year to the French budget” in various taxes, contributions, deductions at source, added the manager, specifying that he “have nothing to hide “. But the group did not pay tax on profits in France in 2021, its French activities (headquarters, refinery, service stations, etc.) being loss-making.
The CEO of the French major indicated that he wanted to play “transparency” when he was heard by the deputies of the “flash mission” which concerns “the oil and gas companies and those in the maritime transport sector which have generated profits exceptional during the crisis”.
TotalEnergies pays taxes in accordance with the “principle of territoriality”
Asked about the much lower level of his tax and social security contributions paid in France, the group’s boss replied that most of his oil and gas production activities were abroad. “In France, the activities we have are not rent activities (oil and gas) but refining”, an activity in which the group “lost money”, he underlined.
He recalled that his group paid taxes in accordance with the “principle of territoriality” which states that “the same profit cannot be taxed twice”. “We make profits in most countries where we produce oil and gas, these taxes are deducted from the French tax base,” he said.
Huge profits for the French major
The announcement this summer of the French major’s huge profits, which more than doubled in the second quarter to $5.7 billion, thanks to the rise in gas and oil prices, reignited the debate on the taxation of these ” super profits”. On this subject, the French government hopes to find a solution at European level rather than at national level.
With the energy boom, in the wake of the war in Ukraine, the European Commission wants to demand “a contribution” from producers and distributors of gas, coal and oil, which would be set at 33% of the higher profits of more than 20 % to the average for the years 2019-2021.
The CEO of TotalEnergies said he was in favor of this mechanism, while warning against “bad signals” which would discourage investment in new projects in the event of “too high a tax”. “In terms of refining, it seems obvious to me that Europe is the right perimeter, because gasoline and diesel products supply the European market”, and not only France, he commented in particular.