The following document sets out the position in relation to tax in the UK and represents how tax is undertaken within the business Volkswagen Financial Services.
The strategy applies to the following entities (referred to as ‘Volkswagen Financial Services Group’/the Group):
· Volkswagen Financial Services (UK) Limited
· Volkswagen Insurance Service (Great Britain) Limited
· Volkswagen Bank GmbH UK Branch
The above companies manage their tax affairs based on five core principles:
The fundamental principle underlying all the tax decisions within the Volkswagen Financial Services Group in the UK is that of paying the right amount of tax in the right place at the right time. This is mandated at a global level by the Board of Management. It involves disclosing all relevant facts and circumstances to the tax authorities and claiming reliefs and incentives where these are made available by tax legislation.
2. Open and transparent approach to engaging with HMRC
The Volkswagen Financial Services Group in the UK seeks to build transparent and collaborative relationships with the UK tax authorities to create and maintain “Good Corporate Citizenship.” We aim to achieve this by engaging with HMRC with honesty, integrity, respect and fairness.
HMRC is kept informed about business developments to the extent they have a tax impact, at regular face-to-face meetings. These meetings are also used by both parties to discuss matters relating to the companies’ tax affairs at the earliest opportunity.
In the event that a disclosure is required, these are made voluntarily or with full co-operation from the business.
3. Management of Tax
Ultimate responsibility for the tax affairs of each company sits with the Board of Management. Each Board has assigned a director with overall responsibility for its ongoing tax affairs. This director is the nominated Senior Accounting Officer for tax purposes.
The Group has a dedicated professionally qualified tax team covering direct and indirect tax matters. Volkswagen Financial Services Group supports the teams in maintaining their Continuing Professional Development requirements. The teams also comply with the ethical standards set out by the Chartered Institute of Taxation.
The tax teams are active members of various tax fora, both with an industry specific focus and those with a tax technical basis. This assists with understanding and maintaining current best practice and keeping abreast with developments.
4. Risk Management
Given the size and global nature of the business, tax risks will arise. The in-house tax teams are appropriately skilled to handle these matters and receive regular tax training and updates to ensure knowledge is always up to date. This enables the teams to identify, monitor and manage tax risks within the business. It also enables the team to identify where specialist external advice is required to ensure the business can remain compliant. External advisors are used to assist the business in achieving its core tax principles as outlined in this document.
5. Attitude to arranging our tax affairs
Volkswagen’s primary tax objective is to pay the correct amount of tax at the point at which it is properly due. We will utilise exemptions and reliefs that are legitimately available and in accordance with the wording and spirit of the law.
The Group is mindful of its reputation in the marketplace and seeks to operate in a manner of a responsible taxpayer.
Transactions between group companies are conducted at an arm’s-length basis and in accordance with OECD principles. Volkswagen Financial Services Group do not undertake profit allocation on the basis of tax rates, and profit follows the business activities of the Group.
Where tax incentives are implemented by the Government to support investment, employment and economic development, the Group will only ever seek to implement these in the manner intended.
Engagement in artificial tax arrangements (those without commercial substance) is not undertaken. Where a point is unclear or uncertain, the companies may seek clarification from HMRC or the judiciary, as appropriate. This is done in order to ensure that the companies comply with their primary tax objective. Tax is not the commercial driver for decision making within the Volkswagen Financial Services Group, nor a key performance indicator.
VW regards its publication of the tax strategy as compliant with the duty under Schedule 19, Part 2, paragraph 22(2), Finance Act 2016.
Chief Financial Officer Head of Accounting
30th November 2017