This tax strategy applies to ChemChina UK Limited and in making this strategy available is fulfilling its responsibilities under paragraph 22(2) of Schedule 19 of the Finance Act 2016. This strategy applies to the accounting period ending 31 December 2022.
The company’s principal activities are the trading of crude oil and engagement in procurement business.
Objectives of the Tax Strategy Document:
· To set out the principles that govern the company’s approach to tax matters generally;
· To consider how the principles will apply in practice;
· To set out the company’s governance framework in respect of tax matters.
Principles of Tax Risk Management (“Tax Principles”)
The principles are guided by the company’s code of conduct. The company’s management uses the following principles as reference points when determining specific policies and courses of action in respect of all the taxes that the company is subject to:
1) The company complies with the law at all times. The company does not countenance tax evasion, either on its own account or in respect of its employees, customers or counterparties;
2) The company’s tax strategy has been implemented and continues to be monitored on on-going basis;
3) The main focus for the company’s management is to manage and control the company’s tax risk (including reputational risk);
4) Opportunities may be taken to reduce the company’s tax costs (in line with the company’s approach to controlling all of its costs) where this is consistent with the wider strategy objectives. However, the company only considers tax planning which supports the wider commercial objectives of the company and which is consistent with the other principles. Tax is just one of a range of factors that will be assessed to determine how a transaction is commercially structured;
5) The company aims to provide appropriate transparency in its internal and external tax reporting;
6) The company maintains an open dialogue, and constructive relationship, with HM Revenue and Customs (“HMRC”).
The company’s tax principles are to be adopted in all aspects of the day to day business of the company where tax is anticipated to be a material factor. In order to achieve this, appropriate processes, controls and approval procedures have been implemented and are subject to ongoing monitoring.
Application of the Principles in specific areas:
1) Business’s internal governance
ChemChina UK Limited does not have defined levels of acceptable tax risk, but rather tax as with other risks is managed within the overall risk framework and the risk appetite as defined by the Board.
2) Compliance with tax filing and payment obligations
The company makes every effort to comply with its legal obligations in relation to tax. This will include filing relevant tax returns and making tax payments within statutory deadlines.
3) Relationship with Tax Authorities
The company aims to maintain an open and constructive relationship with HMRC and other tax authorities (where appropriate). This includes attending meetings requested by HMRC and providing relevant disclosure in tax returns. Where appropriate, the company responds to specific requests for information by HMRC within agreed timeframes and provides relevant and appropriate disclosure in its responses.
Where necessary the company liaises with HMRC to determine and agree where possible the correct treatment of key items, and its compliance requirements, wherever there is uncertainty over the correct interpretation of tax law.
4) Use of external advisors
The need for the involvement of external advisors will be assessed on a case by case basis taking into account the complexity of the issue and its materiality to the business. Where appropriate, advisors will be consulted on the tax implications of a proposed course of action.
5) Statutory accounts preparation
The principles included in this document have been reflected in the tax disclosure(s) made in the relevant statutory accounts. This includes the recognition of appropriate tax provisioning for any transactions which, whilst having been undertaken in accordance with the stated principles, are assessed to carry some tax risk.
Governance of tax matters
The tax strategy is prepared and updated, in conjunction with the finance team. Overall responsibility for the strategy is the responsibility of the Board, with day-to-day responsibility delegated to management team accountable for ensuring the company has appropriate tax accounting arrangements.
Tax risks are documented in a risk register. Risk and internal controls are reviewed regularly and are reported as part of overall reporting on risk and controls to the Senior Accounting Officer.
There may be instances where a particular course of action is necessary (e.g. to satisfy compliance requirements or meet deadlines) which, while not falling within this tax policy, remain within the governance framework of the company as a whole.