OMV’s active contribution to the local economy can drive new business opportunities, showcasing the upside potential of such involvement, and it is guided by the principles outlined in the OMV Taxes and Sustainability Directives. This positive contribution also leads to a positive impact on community investments, demonstrating the benefits of OMV’s economic activities in local development efforts. The policies ensure that OMV adheres to local tax regulations and makes timely payments, which supports financial stability and growth. However, in times of economic downturns, contributions to communities may be lower as a result of reduced payments of local taxes and royalties, highlighting the importance of the Taxes and Sustainability Directives in maintaining consistent and responsible tax and social investment practices.
Taxes Directive
At OMV, we are committed to complying with tax laws in a responsible manner and to having open and constructive relationships with tax authorities, which is also reflected in OMV’s Tax Strategy. OMV’s Tax Strategy is embedded in and reflects the values of our Code of Conduct, and both are publicly available. This policy defines the minimum requirements for taxes, levies and contributions, tax planning and tax accounting, as well as transfer pricing and VAT governance. Our tax planning supports OMV’s business and reflects our commercial and economic activity. OMV does not engage in tax planning, which consists of artificial structures put in place merely to save taxes or transactions lacking economic substance aimed at obtaining undue tax advantages. OMV Group companies are established in jurisdictions deemed to be suitable based on our business activities and the prevailing regulatory environment.
The directive applies globally to all entities and fully consolidated subsidiaries of the OMV Group, but excludes some Borealis subsidiaries such as Rosier S.A. Belgium, mtm plastics GmbH, Kunststoffrecycling GmbH, DYM Solution Co. Ltd., and Etenförsörjning i Stenungsund AB. OMV does not establish its subsidiaries in countries that do not follow international standards of transparency and exchange of information on tax matters, unless justified by operational requirements in line with OMV’s Code of Business Ethics and our Code of Conduct. The Global Tax Directive is the key internal guidance document governing taxes within the OMV Group. The Directive is approved by the OMV Executive Board, and the most senior level accountable for its implementation is the SVP Finance, Tax, Treasury, and Risk Management. We comply with applicable tax laws and seek to limit the risk of uncertainty or disputes. We perform transactions between OMV Group companies on an arm’s length basis and in accordance with the OECD principles currently in force.
OMV fosters open dialogue with governments and tax authorities, aiming for transparency and mutually agreed solutions. The Company actively participates in legislative processes and provides input on the development of tax laws. OMV adheres to financial reporting regulations by preparing its accounts in accordance with International Financial Reporting Standards (IFRS). The Company ensures transparency by disclosing payments made to governments and submitting a Country-by-Country Report (CbCR) to Austrian authorities in compliance with the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan, Action 13. Regular risk reviews, which include tax risks, are conducted and the key risks are reported to the Supervisory Board. The Executive Board promotes a strong risk culture, and the Tax Strategy is reviewed annually by internal experts. The Taxes Directive is available on OMV’s Regulations Alignment Platform and is supplemented with training to ensure that all affected employees understand our general guidelines and know how to apply them in practice.
Enterprise-Wide Risk Management Standard
Geopolitical and economic uncertainty can result in higher taxes and regulatory changes. These challenges can damage OMV’s reputation, as reduced distribution of economic value diminishes opportunities and weakens the Company’s standing with communities and investors. Examples include decreased payments to local budgets. To effectively address these risks and negative impacts, OMV follows the Enterprise-Wide Risk Management (EWRM) standard. This standard ensures that geopolitical and economic risks are proactively identified, assessed, and managed.
The Enterprise-Wide Risk Management standard is the policy that directly manages impacts and opportunities within OMV, particularly addressing risks related to geopolitical and economic uncertainties and lower economic value distribution. This standard provides guidance to corporate functions, business divisions, and their subsidiaries within the OMV Group on assessing, managing, and reporting risks at all levels. It includes instructions on identifying, analyzing, evaluating, and addressing risks to ensure a balance between risks and potential returns. The framework encourages continuous risk assessment, mitigation, and reporting, integrating risk management into daily operations.
For the EWRM Standard, unless otherwise specified, the scope of the policy, involvement of senior-level management, reference to third-party standards (where relevant), interests of key stakeholders in setting the policy (where relevant), and how the policy is made available to potentially affected stakeholders are covered in E5 Resource Use and Circular Economy.
Within OMV’s EWRM Standard, processes and mechanisms are defined to prevent, mitigate and remediate potential negative impacts and risks. These include:
Risk Assessments
We continuously carry out risk reviews, which incorporate tax risks, in order to assess our current and future financial and non-financial risks, evaluate how these trends will impact OMV, and then develop appropriate responses. We report key risks internally to the Supervisory Board at least twice a year through a very clearly defined process. The Executive Board drives OMV’s commitment to the risk management program and sets the tone for a strong culture of risk awareness across the organization.
We apply OMV’s risk management system as part of our internal control processes. We identify, assess, and manage tax risks by implementing risk management measures at the operational level in the form of a robust and complex set of controls and procedures. These guarantee that the correctness of data included in the relevant tax returns, tax payments, and communications with tax authorities is verified in a timely manner. The effectiveness and relevance of these controls and procedures is periodically assessed in order to promptly undertake any necessary mitigation measures and modifications. These measures are implemented to minimize the significant negative risks and impacts identified, which are related to the reduced payment of local taxes and royalties, as well as geopolitical and economic uncertainties.
Sustainability Directive
The Sustainability Directive serves as an overarching policy that manages all significant sustainability matters within the OMV Group. For the Sustainability Directive, unless otherwise specified, the scope of the policy, involvement of senior-level management, reference to third-party standards (where relevant), interests of key stakeholders in setting the policy (where relevant), and how the policy is made available to potentially affected stakeholders are covered in S3 Affected Communities.