Tax Strategy
This strategy applies to all taxes relevant to our business in its jurisdictions, including the UK and takes effect from the date of publication until superseded or otherwise replaced.
Aim
At Fubon, we aim to manage our tax affairs with diligence in
order to implement sustainable development and commit to
corporate social responsibility. We do so by applying the
following set of tax principles across all our operations and
Group entities:
- complying with tax laws, rules, and regulations and disclosure requirements, to report and pay all applicable taxes in a timely manner, fulfilling corporate taxpayers’ social responsibilities. Both the letter and spirit of the laws will be taken into account when performing tax operations.
- complying with all relevant financial reporting disclosure requirements with transparency.
- communicating openly in constructive dialogues with professional attitudes when dealing with local tax authorities.
- any tax planning should be legal and the Group shuld not structure transactions aiming to reduce tax burden as the sole purpose, or not shifting profit to the countries or jurisdictions listed as non-cooperative tax heavens with low tax rate by Organization for Economic Co-operation and Development and EU commission and shall consider the Group’s business operation, social responsibilities in the relevant countries, reputations, risk management and sustainable development.
- considering tax risks as part of the decision-making process in major transactions entered into.
- supporting all personnel with responsibilities for tax matters to ensure that they have the skills, technical expertise and knowledge to effectively and accurately fulfill their tax role and responsibilities.
- Complying with transfer pricing requirements and arm’s length principles in tax law for related party transactions between different countries and jurisdictions.
Tax Governance and Risk Management
We have tax governance policies and practices in place to
identify and manage tax risk across the Group.
The day to day management of tax affairs rests with the Tax
function within our Accounting and Tax Division, and
supervised by the Chief Finance Officer (CFO) and the Tax team
is responsible for reporting to the Chief Executive Officer
(CEO) on tax governance matters as appropriate, in order to
ensure tax risk is properly managed.
All subsidiaries in its jurisdiction, including the UK, should
notify the Accounting and Tax Division in the events of major
tax risk.
Where risks are identified the Tax function works with the
business to take appropriate action to mitigate any risk
identified and where appropriate, engages with tax authorities
to disclose and resolve issues, risks and uncertain tax
positions.
Tax planning and level of risk
Any tax planning undertaken by the Group must comply with
relevant tax laws, rules and regulations and based on
commercial and economic reality. We will not structure
transactions aimed at reducing our tax burden as the sole
purpose, and we will not participate in, or promote,
aggressive tax planning arrangements.
We consider tax risks as part of the decision-making process
with regard to entering into major transactions.
Given the scale of our business, the broad range of our tax
obligations and the complexity of the tax laws that we are
required to comply with, we recognize that uncertainty arises
in relation to our tax affairs from time to time. We have a
low threshold to such uncertainties. Where there is
significant uncertainty or complexity in relation to a tax
risk, we may seek objective advice and opinions from external
advisors. We seek to manage tax risk to avoid unnecessary
disputes.
We also recognize that we are subject to operational tax risk.
We mitigate such risk by ensuring all personnel with
responsibilities for tax have the necessary skills, technical
expertise and knowledge to effectively and accurately fulfill
their tax responsibilities. In addition, we may engage
external experts to provide tax services on matters where we
may lack the appropriate level of tax knowledge and
experience, to ensure we accurately meet our tax compliance
and reporting obligations.
We proactively seek to identify, evaluate, manage and monitor
tax risks to ensure our financial exposure is well understood
and is within a level that we consider acceptable to us.
Approach to relationship with tax authorities
We engage with tax authorities, including Her Majesty’s
Revenue & Customs (HMRC) in the UK, to maintain a
professional and constructive relationship through open
communication and constructive dialogue. We believe this is
the only way when dealing with tax authorities to discuss
past, current and future tax risks and to discuss
interpretation of the tax law.
We aim to make fair, accurate and timely disclosure in
correspondence with tax returns and pay all applicable taxes
and seek to respond to any queries raised and information
requested from tax authorities, in a timely manner.
(Note1) This strategy is published in accordance with
paragraph 19(2) of Schedule 19 of the Finance Act 2016 of the
UK, which applies for the year ended 31 December 2020.
(Note 2) For the Tax Policy of Fubon Financial Holdings,
please refer to this link.
(Downloads: Tax policy)