CGG Group Tax Strategy

A. INTRODUCTION
B. TAX RISK MANAGEMENT & GOVERNANCE
C. ATTITUDE TOWARDS TAX PLANNING
D. RELATIONSHIPS WITH TAX AUTHORITIES
E. UK CONTEXT

A. INTRODUCTION

The CGG Group is a fully integrated Geoscience company providing leading geological, geophysical and reservoir capabilities to its broad base of customers primarily from the global oil and gas industry.

In this document, The Group sets out its strategy for conducting its tax affairs and managing tax risk.

 Top

B. TAX RISK MANAGEMENT & GOVERNANCE

The Group’s policy is to comply with all applicable laws, rules, regulations, and reporting and disclosure requirements, wherever there is a requirement to do so as a result of our business presence and transactions. The Group manages its tax affairs in line with its Business Code of Conduct.

The Chief Financial Officer (‘CFO’) is ultimately responsible for management of the Group’s tax affairs. The strategy and the day-to-day management of tax matters are delegated to the Senior Vice President of Tax (‘SVP Tax’), who reports to the CFO.

Compliance with the Tax Strategy is monitored within the overall risk framework and governance structure of CGG. This includes regular updates by the SVP Tax to the Group Audit Committee on material tax matters and tax risks.

CGG operates a ‘three lines of defense’ model for managing tax risks. Within this, the first line is delivered by the operational management who have ownership, responsibility and accountability for directly assessing, controlling and mitigating risks; the second line is provided by the Group tax team headed by the SVP Tax who provide technical oversight and support and maintain relationships with tax authorities; and the third line is delivered by Internal Audit who provide assurance to the Board and senior management on how effectively the Group assesses and manages its risks and controls.

Diligent professional care and judgment will be employed by the Group tax team to assess tax risks in order to arrive at well-reasoned conclusions on how the risks should be managed. Where there is uncertainty as to the application or interpretation of tax law, appropriate written advice evidencing the facts, risks and conclusions may be taken from third party advisers to support the decision-making process. In particular, the Group tax team would seek to obtain advice from reputable external advisers with the appropriate experience in areas where tax law is complex or new, is outside the experience of the tax team, or where the treatment may be uncertain and the amount of tax involved is material. CGG may also use these services in-house where business demands exceed the capacity of the team.

 Top

C. ATTITUDE TOWARDS TAX PLANNING

Key business decisions are made in view of the tax consequences and with the aim of optimizing the after-tax returns for the Group’s shareholders, but the Group will only engage in reasonable tax planning that is aligned with commercial and economic activity.

In line with CGG’s strategy for managing risk, CGG regularly seek external advice on tax matters in order to ensure the group is and remains compliant.

 Top

D. RELATIONSHIPS WITH TAX AUTHORITIES

The Group is committed to the principles of openness and transparency in its approach to dealing with tax authorities wherever we operate around the world. All dealings with the tax authorities and other relevant bodies will be conducted in a collaborative, courteous and timely manner. The aim would be to strive for early agreement on disputed matters, and to achieve certainty wherever possible.

 Top

E. UK CONTEXT

The Group is required to publish a tax strategy concerning its UK tax affairs in accordance with Schedule 19 of the Finance Act 2016. This is the Group’s tax strategy in relation to these provisions. The CGG Group aims to follow the Draft Framework for Cooperative Compliance published by HMRC in December 2015, in particular to:

  • adopt open and collaborative professional relationships at all times with HMRC;
  • engage in full, open and early dialogue with HMRC to discuss tax planning, strategy, risks and significant transactions;
  • make fair, accurate and timely disclosure in correspondence and returns, and respond to queries and information requests in a timely fashion;
  • seek to resolve issues with HMRC in real time and before returns are filed if possible, and where disagreements arise, work with HMRC to resolve issues by agreement (where possible);
  • be open and transparent about decision-making, governance and tax planning;
  • reasonably believe that transactions are structured to give a tax result which is not inconsistent with the economic consequences (unless specific legislation anticipates that result), nor contrary to the intentions of Parliament; and
  • interpret the relevant laws in a reasonable way, and ensure transactions are structured consistently with a co-operative relationship.

The Group does not tolerate tax evasion or the facilitation of tax evasion. Following the introduction of the Corporate Criminal Offence of Failure to Prevent the Facilitation of Tax Evasion, as part of the Criminal Finances Act 2017, we seek to apply appropriate procedures and controls to prevent any person acting for or on our behalf from facilitating tax evasion.

 Top

This tax strategy was approved on 3 October 2019