Tax policy & transfer pricing

These issues are the subject of much debate. Our Code of Business Principles guides our approach to tax.

Our tax policy

Our Code of Business Principles requires all Unilever companies to comply with the laws and regulations of the countries in which they operate, and this applies just as much to taxation as to any other issue.

Our Code also encourages our businesses to represent their views on the formulation and administration of tax laws, either directly or through trade associations and similar organisations. We are actively engaged in discussions with the OECD and some of its member countries on the issue of tax and development, and how a fair and transparent tax system can contribute to the fight against poverty and corruption.

In order to create and preserve value, we will seek to minimise our tax liabilities while complying with all applicable laws.

Steps taken to minimise tax liability must be consistent with our general standards and ethics, notably our Code of Business Principles, and with the OECD Guidelines for Multinational Enterprises. They must also be aligned with our business strategy and our business operations.

How do we handle transfer pricing?

National governments are concerned about how multinational companies account for the value of sales between their operating subsidiaries, as 'internal' prices can be set artificially low to reduce profits in high-tax countries. Both governments and NGOs are increasingly scrutinising companies’ tax practices as they are keen to ensure that taxes are not ‘lost’ to countries, thereby depriving them of income and development.

Our own worldwide policy on transfer pricing is based on the 'arm's length' principle, in keeping with guidelines developed by the OECD.


Our Board’s Audit Committee is responsible for overseeing our policy on tax planning. This Committee comprises only independent Non-Executive Directors. The Financial Leadership team, chaired by the Chief Financial Officer, is responsible for Unilever's tax strategy.

Taxes paid

In 2010 Unilever paid €1 328 million to governments in corporation tax. There are also other types of tax which we pay to local, regional and national governments: taxes on profits, employer taxes, sales taxes, customs duties and local taxes.

Local studies

Unilever has carried out three country studies, mapping our economic impacts.

The first study, with Oxfam in Indonesia, explored the links between wealth creation and poverty reduction. Of the total value created by the business in 2003 (the year the study focused on), it was found that the Indonesian government received an estimated 26% of the total.

In the second study, Unilever asked INSEAD to examine the economic impact of its operations in South Africa. The study revealed that, among other findings, the direct and indirect contribution of Unilever South Africa on government tax revenues totalled R4 billion, equivalent to almost 0.9% of all government revenue.

Vietnam's Central Institute for Economic Management (CIEM) also carried out a study of our economic footprint in Vietnam. The study found that Unilever Vietnam is a substantial taxpayer in the country, with total sales representing 1% of Vietnam's GDP (gross domestic product), and directly employing 1 200 people and creating up to
8 000 indirect jobs.

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