TAX STRATEGY
Introduction
This document is produced in accordance with the requirement under Section 161 and paragraphs 19 and 22 of 16(2) Schedule 19 Finance Act 2016 for the Royal Terberg Group to publish its UK tax strategy and sets out the group’s approach to tax.
The Royal Terberg Group (“Group”) is a multi-national enterprise, conducting cross border trade with both third parties and Group members. As such tax has an impact on the business wherever it operates. The Group sees taxation as an important consideration at all levels, respecting the letter and spirit of the law in all areas of operation, and applying appropriate international standards (such as compliance with OECD Guidelines) to our conduct.
This policy applies to all individuals concerned with the tax affairs of the Group[1].
Tax Governance
Local financial controllers, or equivalent roles dependent on title, consider tax at entity level and report into Group with tax considerations. The leadership teams at entity level liaise regularly at both local entity level and with the board of Group to identify and consider areas of risk and control.
- The directors of the entities are responsible for maintaining a system of risk management/internal control supported by the local finance director/controller. The Head of Legal and Tax together with the Group Controller identify and assess whether the risks are properly managed and advise the local management of implementation of measures to mitigate any risks.
- The board of Group are advised of material tax disputes through updates provided to the board of Group by representatives from entity level, such as the entity CFO.
- The Finance departments of the entities are responsible to review the risks (which includes the tax risks) and report to the board in case risks are not properly mitigated. The Finance department is supported by the Group Head Legal and Tax and the Group Controller to assess the risk and design appropriate controls. On an annual basis the tax returns and tax risks are discussed with the entity’s tax advisors, which supports identification and management of tax risk.
- Training is provided to internal staff to ensure tax compliance is carried out with a suitable level of diligence and technical expertise, where such work has not been outsourced.
Attitude to tax planning
The Royal Terberg Group does not operate a contrived or artificial structure intended to circumvent profits to a low tax jurisdiction, and is co-operating in the spirit of tax transparency, fulfilling the requirements of Country-by-Country reporting, group member tax returns being filed on bases compliant with OECD guidelines.
- Attitude to tax planning is ultimately determined by the board of Group, following representations at entity level.
- The Group has not entered into any transactions which could be considered contrived, artificial or aggressive for tax purposes, nor does it have an appetite to do so in the future.
- The Group does not seek to achieve a target effective tax rate, neither as a Group nor at entity level, nor does it seek to manipulate profits to favour any tax jurisdiction.
- The Group ensures compliance with all laws and relevant regulations in the countries in which it operates, and makes full and timely disclosures in tax returns, reports, and documents submitted to taxing authorities.
- We operate in areas in which local governments offer tax measures to incentivise businesses, such as through research and development credits. These incentives are obtained by the Royal Terberg Group where they are appropriate to the business and operation objectives of the Group. We do not operate in these areas with the sole or main aim being to achieve these incentives. The Boards at Ultimate Parent and all entity levels declare the relevant profits in the relevant countries after relief has been taken for the appropriate deductions and reliefs. Where there is an area of ambiguity in tax treatment, we are able to seek confirmation from the tax authority with full disclosure of the relevant facts.
- Cross-border transactions undertaken between Group subsidiaries are made on an ‘arm’s-length’ basis in accordance with the principles endorsed by the OECD. The Group holds transfer pricing documentation as directed by the OECD Action 13.
Tax Risk
We recognise that tax is an inherent part of our day to day business operations and our approach to tax risk follows our wider principles and values applied to commercial transactions; maintaining our reputation and integrity are important and are key considerations when assessing tax risk. This section considers an overview of the approach to tax risk management:
- The Finance departments of the entities are responsible to review the risks (which includes the tax risks) and report to the board in case risks are not properly mitigated. The Finance department is supported by the Group Head Legal and Tax and the Group Controller to assess the risk and design appropriate controls. On an annual basis, the tax returns and tax risks are discussed with the entity’s tax advisors.
- Ultimately, our tax position is led by commercial activities; when considering a significant transaction, tax is only one of the many factors that we examine.
- Significant transactions are discussed with the Head of Legal and Tax and Group Controller in order to determine whether the transaction is in compliance with local and international law and regulations. Appropriate external advice is obtained from suitably qualified advisors.
- Given a number of alternatives, an approach with a lower tax cost may be implemented provided it is compliant with laws and relevant regulations, advantage being taken where possible of available tax incentives. Supporting tax documentation is prepared and maintained as required by law and, where necessary, to support a transaction or approach involving a tax impact.
Working with Taxing Authorities
Royal Terberg Group maintains a respectful and professional working relationship with taxing authorities. The Group operates on the basis of full transparency, ensuring all tax filings and disclosures are made on a timely basis.
Where issues arise we work co-operatively and pro-actively with the taxing authorities to find a resolution.
Notes
1 This policy applies to all UK entities within the Group which is parented by Royal Terberg Group BV, and includes TRRG Holding Ltd, Terberg RosRoca Group Ltd, Dennis Eagle Ltd, Dennis Eagle Group Ltd, Terberg Matec UK Ltd, Refuse Services Ltd, Terberg Environmental UK Ltd, Terberg DTS (UK) Ltd.
This tax strategy applies to the financial year ended 31 December 2021 and until it is replaced, and has been approved by the Group Board.