Obligations and guarantees
Full cost coverage
All SAGESS costs covered by the CPSSP
As per the CPSSP / SAGESS agreement, approved by Ministerial decree, SAGESS recovers all operating, financing and exceptional costs from the CPSSP, guaranteeing a structurally balanced statement. The CPSSP receives monthly fees from oil operators, calculated to cover its own and SAGESS’ costs, balancing the oil reserves accounting system. In addition, the CPSSP is financially guaranteed up to three months of fees in case of default by oil operators.
SAGESS costs are divided into three major areas : product storage and stocks maintenance costs (renting facilities, storage at third party locations maintenance, stock renewal, product upgrades, control and insurance costs), expenses related to financing (bonds, commercial papers and bank loans) and overhead expenses.
Dedicated tax scheme
SAGESS, which is non-profit, has a preferential tax scheme exempting it from income taxes. A tax article in the General Tax Code (1655 quater) exempts SAGESS from corporate taxes, forbids the release of stock without a government order or a request from the CPSSP, protects it from any risk of loss in case of stock sales, and allows the transfer of SAGESS titles only through a ministerial authorization. As regards VAT, SAGESS is not subject to VAT for all storage-related operations and recovers the VAT when applicable (general tax rules).