Siemens UK Tax Strategy - Year ended 30 September 2018
This page sets out the strategic tax objectives for Siemens UK as required by Finance Act 2016, Sch 19 para’s 19 and 22. This strategy applies to all Siemens UK entities. In this strategy, references to ‘Siemens UK’ are to all Siemens UK companies and branches. This strategy is not designed to be an operational manual with detailed instructions on the execution of the processes. The processes and controls which support the delivery of the strategic tax objectives are regularly reviewed. Our tax strategy is reviewed annually. The Chief Financial Officer and Head of Tax are responsible for management of the tax affairs of the group. This strategy applies from the date of publication until it is superseded. References to ‘UK taxation’ are to the taxes and duties in the UK which include: · All corporate income taxes · Indirect taxes (VAT, Stamp Duty Land Tax) · Employment taxes (PAYE / National Insurance / Construction Industry Scheme) · Other applicable tax matters The tax strategy is approved by the managing board of Siemens UK and sets out the group's general tax arrangements as well as the policy and approach to tax risk management, attitude to tax planning and working with HMRC.
Aim and Alignment with group policy
As part of a multinational group we are aligned with and follow the wider Siemens guiding principles, code of conduct and tax policy for the group.
The organisation operates a set of Business Conduct Guidelines which lay out rules which all businesses and employees must act in accordance with. These include the requirement that observing the law and the legal system is a fundamental principle for Siemens. All employees must obey the laws and regulations of the legal system in addition to all applicable Siemens policies. Violations of the law must be avoided under all circumstances.
The guiding principles for the tax organization are:
We act as a responsible global corporate tax citizen in compliance with applicable tax law and regulations.
We encourage ethical and transparent business practices and do not employ legal entities for purposes of tax avoidance. We encourage an open and honest dialogue between tax policy makers and business.
We actively engage in the development of a rule based international tax framework.
We make tax part of every important business decision.
We report and disclose our tax positions in accordance with applicable regulations and requirements.
Tax code of conduct and tax policy at Siemens
We see the strict compliance with the legal framework set by national legislators and internationally recognised standards as our obligation.
The increasing complexity and uncertainty in the international and national tax systems requires us to have mechanisms in place that ensure all policies and regulations are adhered to. It is our primary objective to act in accordance with the respective tax laws in the countries we operate in.
Siemens in the UK
Tax strategy and strategic objectives
In line with a new group structure, Siemens in the UK will be arranged in to 3 operating businesses (Gas and Power, Smart Infrastructure, Digital Industries) and 3 strategic businesses (Siemens Healthineers, Siemens Gamesa Renewable Energy and Siemens Alstom – subject to regulatory clearance). The realignment from the new group structure will enable Siemens to orientate its activities on the requirements of the industries in which it operates.
The tax strategy and strategic objectives are intended to establish a clear and unequivocal approach to all aspects of tax reporting and compliance in which ever industry the company operates. This supports robust internal governance which defines our control framework.
The tax strategy is focused on ensuring that taxes (and tax risks) are managed to provide outcomes consistent with commercial reality and are within the parameters of the Group’s strategic objectives. The strategy also requires that all tax obligations are complied with in the UK and other relevant jurisdictions.
With the tax landscape constantly changing, Siemens UK’s tax affairs and tax risk management procedures are regularly reviewed to ensure that processes and measures are up-to-date so that we are able to identify, assess, manage and mitigate tax risk as well as being aligned with the Siemens Group’s business strategy and governance framework.
Tax risk management and risk appetite
The day to day management of Siemens UK tax affairs is provided by the UK tax team. The tax team have appropriate qualifications and relevant experience.
Processes relating to different taxes are allocated to appropriate specialist functions within the tax team who carry out a review of activities and processes to identify key risks and mitigating controls in place. These key risks are monitored for changes in business and legislation and processes and controls are updated accordingly.
Siemens seeks to reduce the level of tax risk arising from its operations, its business partners and any other associated persons as far is practically reasonable by following internal guidelines and using relevant tools.
Siemens UK utilises tax reliefs and allowances available in the manner in which intended by HM Revenue & Customs and statute. There will, however, be circumstances where this amount may not be clearly defined, or where alternative approaches may result in differing tax outcomes. The Group will use its best judgment in determining the appropriate course of action, using available reliefs and incentives where possible and liaising with HMRC where appropriate.
Siemens UK does not engage in artificial tax arrangements and ensures that the outcomes are consistent with commercial realities.
Siemens UK’s appetite for tax risk is low and we only structure our affairs based on sound commercial principles and in accordance with the Siemens Group policy and relevant tax legislation. Aggressive tax planning is not proactively considered and external advice is sought where appropriate.
Relationship with HRMC
It is Siemens UK’s general policy to be transparent and proactive in all interactions with HMRC through regular meetings and communications with HMRC.
We have an open, honest and positive working relationship with HMRC. We are committed to prompt disclosure and transparency in all tax matters with HMRC. We recognize that there will be areas of differing legal interpretations between ourselves and HMRC and where this occurs we will engage in proactive discussion to bring matters to a timely and appropriate conclusion.
Any inadvertent errors in submission of tax returns and tax computations to HMRC are fully disclosed as soon as reasonably practicable after they have been identified.