This policy has been published in compliance with the duty imposed under paragraph 16(2) of Schedule 19 to the Finance Act 2016.
2. Tax in our Annual Report (Form 10-K)
The Company’s business activities around the world incur a substantial amount and variety of business taxes. We pay corporate taxes, customs duties, excise taxes, stamp duties, employment and many other business taxes. In addition, we collect and pay employee taxes and indirect taxes such as excise duties and Value Added Tax. The taxes we pay and collect represent a significant part of our economic contribution to the countries in which we operate.
There are a number of reasons why the corporate tax cash payments in a particular year will be different from the corporate tax expense in the financial statements, including timing differences and deferred taxes.
We provide extensive information on taxes in our annual report, Form 10-K. The tax disclosures in our Form 10-K (see pages 41-42 and Note 14 on pages 119-123 of The
3. Tax Function Responsibilities and Organization
The VP of Tax is responsible for managing the Company’s Tax function globally and leads a senior team with specific geographic and technical responsibilities. The
4. Tax Governance and Risk Management
We are committed to being an ethical and responsible business, and good corporate citizen, and have been recognized externally for this by a number of independent third parties, including FTSE4Good, UN Global Compact and 100 Best Corporate Citizens.
The Company’s Code of Business Conduct2 addresses our responsibilities to the Company and its investors, customers, suppliers, consumers, and governments and defines how employees should conduct themselves as representatives and ambassadors of the Company. All employees of the Company are expected to understand the Code of Business Conduct and are expected to comply with the Code in addition to all applicable government laws, rules and regulations. The Company’s approach to taxation is grounded in these values, the principles of which are reflected in our Code of Business Conduct.
In addition to reporting directly to the Chief Financial Officer of the Company, tax regularly presents to the Finance Committee of the Board of Directors on the Company’s tax status providing annual updates on significant tax matters including the Company’s effective tax rate. In addition, tax periodically presents to the Audit Committee of the Board of Directors as well. These presentations include discussions of factors that impact our effective tax rate including the world-wide economy, tax reform, fluctuations in currency, and the tax impact on amounts to be repatriated to the U.S.
The Company has robust internal control procedures and processes in place, including quarterly formal certification procedures. These procedures help identify, evaluate, monitor and report tax issues and risks. These internal control procedures and processes are subject to regular reviews, internal audits and self-assessments programs. In addition to the control procedures mentioned above, The
5. Tax Planning and Level of Risk
The Company complies with all tax rules and regulations, including the OECD’s transfer pricing guidelines on a worldwide basis. The Tax department advises the business on the tax consequences of transactions so that the business may structure its affairs in the manner that supports the business’ commercial and economic activity. The Company does not engage in artificial tax arrangements. The Company seeks to minimize the risk of uncertainty or disputes. If a significant transaction occurs that may give rise to different interpretations, the Company generally tends to proactively seek advice from expert advisors in order to determine the best interpretation. In addition, the Company often chooses to disclose such a transaction to the relevant tax authorities in the form of an official request for interpretation or a disclosure in our annual tax return.
As a result of employment actions and capital investments made by the Company, certain tax jurisdictions provide income tax incentive grants. The Company is committed to apply these grants in the manner intended as set out in the local country’s laws.
Relationship with Taxing Authorities
We seek to develop open and mutually respectful relationships with governments and fiscal authorities based on transparency and trust. We work collaboratively wherever, and whenever, possible with fiscal authorities to resolve disputes and to achieve early agreement and certainty. We engage with governments on the development of tax laws either directly or through trade associations and other similar bodies as appropriate.
In the U.K., the Company adopts an open, professional and transparent relationship at all times with Her Majesty’s Revenue and Customs (HMRC). The Company engages in full, open and early dialogue with HMRC in relation to tax planning, compliance, strategy, risks and significant transactions. The Company is committed to making full and accurate disclosures in tax returns and in correspondence with HMRC. The Company seeks to co-operate with HMRC at all times and to deal with issues in a timely and collaborative manner. Should genuine differences of opinion occur on the application of tax law, the Company will always seek to resolve such an issue with HMRC though open dialogue and with reference to the relevant legislation and tax law.
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