Tax liabilities of subsidiaries of the Zarubezhneft JSC Group of companies
Taxation, along with such macroeconomic factors as fluctuations of the oil price and the Ruble exchange rate, significantly influences the performance of the Zarubezhneft JSC Group of Companies. The share of tax and other mandatory charges in the Production segment costs comprises 35% of the revenue.
The calculation and payment of tax and other mandatory charges by the Zarubezhneft JSC Group of Companies is conducted in strict compliance with the current legislation of the Russian Federation, Bosnia and Herzegovina and the Socialist Republic of Vietnam.
The subsidiaries of Zarubezhneft JSC perform their obligations to pay taxes, charges, duties, and insurance contributions to the budgets of all levels and non-budget funds of the Russian Federation in full.
The significant increase in tax payments in 2018 is primarily due to the increase in mineral extraction tax expenses, which occurred mainly as a result of the increase of the Urals price in ruble equivalent.
The structure of tax payments with regards to the Upstream and the Service and Other Assets segments differs significantly due to the presence of sectoral taxes in the Upstream segment (MET, export customs duties on oil, and royalties and state profit oil within Kharyaga PSA).
Vietnamese assets of Zarubezhneft JSC make payments to the budget system of the Socialist Republic of Vietnam. In 2018, the amount of payments amounted to USD 1,263 million.