Ørsted is recognised as a leader in responsible tax practices and tax transparency. This supports our ambition to help build green energy in a way that gives back to society.
Why are responsible tax practices important?
Tax contributions are a key part of the positive social and economic impact we can make as a business. They help the local economies in which we operate to deliver valuable public services, such as healthcare, education, and transport, and build the infrastructure that allows businesses to thrive.
By being a responsible taxpayer and engaging with policymakers to support robust tax regulations, we support well-functioning societies, institutions, and regulations that are conducive to both people and business.
What are we doing?
- We aim to comply not only with the letter of the law, but also the underlying policy intent behind it to ensure that we pay the right amount of tax, at the right time, in the countries where we operate.
- We engage with stakeholders and cooperate with local market authorities to support effective tax systems, honouring our commitment to be a responsible taxpayer.
- We’re transparent in our tax reporting and voluntarily report using the GRI 207 standard as a basis, which includes disclosing financial, economic, and tax-related information for each jurisdiction where we operate in our annual report.
- We regularly participate in and speak at tax conferences with a view to informing the community on how tax regulations can play a part in the green transformation.
How are we doing?
We consistently meet our ongoing target of a Group effective tax rate of 19 %. This refers to the rate at which our taxable ordinary profits for the year are subject to tax. It demonstrates that we pay tax at a rate that’s sustainable and that we don’t engage in aggressive tax planning.
A Group effective tax rate on ordinary business (profit and tax adjusted for one-off items) (%)
Latest updates from 2023
- We retained the Fair Tax Mark, becoming the first Danish multinational company to secure consecutive accreditation to the global gold standard of responsible tax conduct.
- We expanded our country-by-country reporting to show our earnings and tax payments across the jurisdictions where we operate.
- We engaged with the OECD – both in written submissions and in panel debates – on the implementation of the global minimum tax (Pillar 2). In particular, we addressed issues related to safe-harbour mechanisms, and compatibility with the US subsidies for renewable energy.
- We provided tax authorities with insights into energy markets, including hedging, to support the implementation of revenue caps in the EU and the UK. The aim was to ensure that only actual profits of green electricity producers were affected by these caps.
- We received a Low Risk rating from the HMRC in the UK, confirming our responsible tax processes and procedures.
- We provided responses on several public consultations in the US on the implementation of and guidance to the Inflation Reduction Act.
- To promote responsible tax practices, we’re engaging with CSR Europe on developing a European index for responsible tax practices.
- We took part in the Danish people's meeting, 'Folkemødet', in Denmark, with a view to promoting responsible tax practices.
What’s next?
We’ll maintain our focus on transparency and accountability across our tax payments and reporting to fully satisfy increasing compliance and reporting requirements.
Key information
Partnerships
We engage in partnerships with a view to encouraging progressive tax regulation, staying up to date on policy developments, and engaging with peers on responsible practices:
- The Danish Confederation of Enterprises’ Tax Panel, with a view to influencing tax regulations and staying up to date on tax policy developments.
- The Tax Dialogue, with a view to staying updated on tax policy developments.
- The B-Team, to engage with peers on responsible tax principles and tax governance matters.
- The Fair Tax Mark, where we’ve been accredited for our responsible tax practices.
International frameworks
- OECD BEPS and Pillar I and Pillar II
- EU directives, e.g. ATAD, DAC6, and CbCR
- Applicable local and international tax legislation
Governance
Accountability lies with our Chief Financial Officer. Our Board of Directors reviews and approves the tax policy annually. Day to day operations are managed by a centralised global tax team. Significant business decisions are referred to Ørsted’s Investment Committee and/or Board of Directors after approval by TAX.
Policies
These efforts contribute towards the following Sustainable Development Goals:
