Global Tax Policy

Overview

Our SPIRIT Values and Code of Business Ethics and Conduct constitute key components of our company culture. This framework underpins our Global Tax Policy and guides how we conduct our tax affairs. Our objective is to maintain procedures and make decisions which are fully compliant with all applicable tax laws in the jurisdictions where we operate. Since becoming one of the world’s largest independent exploration and production companies in 2012, ConocoPhillips has paid over $50 billion in current income and non-income taxes (e.g., property taxes, severance taxes and payroll taxes). These taxes are paid to numerous jurisdictions around the world supporting the public finances of the countries and communities where we operate.

Governance and Compliance

ConocoPhillips’ General Manager, Tax, manages the tax department and reports to our Vice President, Controller and General Tax Counsel, who reports to our Executive Vice President and Chief Financial Officer. The General Manager, Tax, updates the Audit and Finance Committee of the board of directors on the company’s tax position and significant tax matters at least annually (and more frequently as needed). ConocoPhillips complies with the tax requirements in all jurisdictions where we operate. Required tax return filings and payments of related taxes are made in a timely and accurate manner in compliance with statutory requirements. Our tax professionals are highly qualified and committed to the highest compliance standards.

Risk Management

Oversight of tax matters is ensured through internal review by appropriate members of ConocoPhillips’ tax leadership team, with oversight by our internal audit function, and ultimate oversight by the audit committee of our board of directors. ConocoPhillips annually tests the effectiveness of relevant internal controls, including those over financial reporting of income taxes. Other internal tax controls and processes are reviewed regularly and updated as appropriate to ensure robust tax reporting and compliance in accordance with relevant accounting and reporting standards. Our tax team continuously reviews changes to the tax law and regulatory requirements in the jurisdictions in which we operate to identify and manage associated risks. Internal tax staff (with input from external technical subject matter experts as needed) implement any required changes to financial tax accounting or compliance processes.

Transparency and Relationships with Tax Authorities

ConocoPhillips is committed to working with tax authorities in the jurisdictions where we operate in an open and transparent manner with the goal of minimizing disputes and timely reaching mutually agreeable outcomes, if possible. We seek to build and maintain long-term relationships with tax authorities based on mutual respect and trust. We strive to make a significant difference in the communities where we operate and are committed to respectfully engaging with local stakeholders.

ConocoPhillips files annual country-by-country reports to the IRS, which disclose certain tax information, including income tax payments and income tax expenses. These disclosures are shared by U.S. tax authorities with other jurisdictions with which it has signed information exchange agreements.

Stakeholder Engagement and Management of Stakeholder Concerns

ConocoPhillips has an established policy and process, as described in our Code of Business Ethics and Conduct, to raise concerns about the organization’s business conduct and integrity in relation to all matters, including tax. In addition, we are committed to working with tax authorities in a transparent manner. Additionally, we have a process for shareholders to submit proposals for consideration and voting at our annual shareholder meetings. Investors are also welcome to submit questions, comments and suggestions via our website at any time.

ConocoPhillips also participates in industry trade associations on tax matters to stay updated on relevant tax legislation, share knowledge and expertise, develop industry best practices, and contribute to public education efforts.

Approach Towards Risk and Tax Planning

In managing its tax affairs, ConocoPhillips is guided by the following principles:

  • Full compliance with all applicable tax laws.
  • Open, transparent and constructive engagement with the government authorities in the jurisdictions where we operate.
  • Utilization of internal and/or external expertise to review significant and/or technically complex business transactions.
  • Timely compliance, reporting and payment of taxes.
  • Undertaking transfer pricing using arm’s length principles.
  • Prudent tax planning in support of our business activities, driven by commercial substance.

For more information on ConocoPhillips’ tax policy and tax disclosures, please visit our Tax Disclosures webpage.