As a multinational corporation, Sanofi has a responsibility to pay the appropriate amount of taxes in the countries where it does business by complying with the laws and regulations. Our main objective is to ensure that tax is paid, and tax returns are filed on time.
Oversight and governance of tax matters is primarily ensured by the corporate Tax Department which implements and maintains robust tax policies and procedures. The Global Head of Tax together with the Company CFO reports annually to the Audit Committee who reports to the Sanofi board. A set of internal controls has also been implemented to support the operational effectiveness of the tax policy
Relationship With the Tax Authorities
Sanofi seeks to develop and maintain an open, transparent, and collaborative approach with the tax authorities and other governmental bodies worldwide. When possible, Sanofi engages in partnerships with the tax authorities and requests for advance agreements on complex tax or transfer pricing matters. The same open and cooperative approach also applies to regular tax audits in most countries where Sanofi operates.
Tax Strategy
Sanofi’s tax strategy is aligned with its business strategy which is based on its commercial and industrial investments as well as its people in order to create value, sustain competitiveness and manage tax and reputational risks. Sanofi’s tax planning is driven by business considerations and supported by substantive business transactions. Sanofi does not engage in tax evasion nor in tax fraud. Sanofi tax planning is aligned with its values and the business strategy defined by Sanofi’s management.
Sanofi is present in a limited number of countries that could be perceived as tax havens. However, this is justified by its commitment to meet its patients’ and residents’ needs for medicines and vaccines around the world, as well as by substantive business transactions. Sanofi’s presence in such countries is therefore not operated specifically to avoid tax.
On the transfer pricing area, Sanofi applies the OECD guidelines and any country-specific legislation and is targeting “arm’s length” remuneration for all inter-company transactions. Sanofi’s transfer pricing policy is duly documented and supported by economic analysis. In order to minimize uncertainty, Sanofi is engaged in Advance Pricing Agreements or Mutual Agreement Procedures for structural flows with major countries to ensure long-term visibility for Sanofi and the tax authorities.
2024 Key Figures
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Key markets: The long history of Sanofi results in a significant proportion of income tax being paid in Western Europe and US, where the intellectual property of many of our leading products is located. In 2024, the amount of income taxes we paid relating to 2024 in our three main countries (Germany, US and France) represented 74% of our group cash tax. Our headquarter is in France. More than 25 manufacturing sites (including most of the principal ones) and nearly half of our Research and Development sites are in Western Europe.
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Income tax expense: Our accounting policy for Incomes taxes is clearly defined and explained in Sanofi Form 20-F 2024 Notes to the consolidated financial statements B.22. Income tax expense. In 2024, Sanofi’s Income Tax charge on business operating income was €2.168 billion worldwide and Income Tax paid amounted to €3.291 billion.
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Effective tax rate: The effective tax rate on business operating income was 19.8% compared with 17.7% in 2023. It provides a means to analyse the effective tax cost of our current business activities. It should not be seen as a substitute for the effective tax rate on consolidated income before tax. Based on consolidated income before tax (i.e. including items such as amortization and impairment of intangible assets and restructuring costs and similar items), Sanofi’s Income Tax charge was €1.2 billion worldwide. The effective tax rate was 18.0% compared with 16.3% in 2023.