Year Ended 31 December 2017
Prepared in accordance with the requirements of Schedule 19, Finance Act 2016.
Within HEINEKEN we believe that responsible tax behaviour is an essential element of our sustainability strategy. The taxes we pay are an important part of our contribution to local economies and support the development of the many countries in which we operate.
We support stable, transparent and predictable tax regimes that incentivise long-term investment and economic growth. We also support the principles that underpin the OECD’s work on Base Erosion and Profit Shifting (BEPS), including country-by-country reporting to tax authorities. HEINEKEN is working to ensure compliance with the new requirements.
In support of HEINEKEN’s business priorities we pursue a tax strategy that is sustainable and transparent. This strategy is annually reviewed and approved both by the Executive Board and the Audit Committee.
Our commitment to tax planning is based on a number of key principles which conform with the HEINEKEN Global Tax Strategy:
HEINEKEN is present in more than 70 countries, with a growing share of its revenues originating from emerging markets.
The tax legislation in these countries, is often complex and subject to interpretation. Recent international tax developments (incl. BEPS) have increased the likelihood of changes to tax systems in the countries where we operate, and may lead to additional uncertainty and risk. Failure to comply with applicable regulations could lead to fines, claims and reputation damage.
The international spread of our business, a robust balance sheet and strong cash flow, as well as a commitment to prudent financial management, form the context based on which HEINEKEN determines its appetite to risk. A structured risk management process allows HEINEKEN to take risks in a managed and controlled manner. Key to determining the risk appetite is the nature of the risks. In this respect, HEINEKEN is averse to the risk of non-compliance with applicable tax laws or regulations.
HEINEKEN has put in place a comprehensive risk management system which identifies, assesses, prioritises and manages risks on a continuous and systematic basis, and covers all subsidiaries across regions, countries, markets and corporate functions.
The identified tax risks are then assessed on a case by case basis, allowing HEINEKEN to arrive at well-reasoned conclusions on how each individual risk should be managed. Where there is uncertainty in how the relevant tax law should be applied, external advice may be sought to support the decision making process.
When reviewing the tax risks associated with a specific decision or action, HEINEKEN ensures that the following are considered: the legal and fiduciary duties of directors and employees, the requirements of any related internal policies or procedures and the maintenance of HEINEKENs corporate reputation, having particular regard to the way we interact with the communities around us.
Our tax function ensures tax compliance of all HEINEKEN companies. It maintains communications with tax authorities and advises management on tax-related topics. External advisors are involved in material transactions or when a specific area of expertise is required. The Global Tax Department monitors and supports the local tax function and sets the global tax policies together with the Executive Board.
At a local level, the Head of Finance reports to the Managing Director. The Head of Finance is responsible for all taxes which impact the business. The wider accounting team member are suitably trained and experienced to deal with the day to day administration of all taxes. The input of suitably qualified external advisors is a key source of expertise to supplement the skills of our own team. External advisors are therefore used when required on specialist matters.
We seek to develop strong relations with HMRC based on based on respect, transparency and trust. We are committed to a collaborative approach in our dealings with HMRC.
We engage with HMRC through our Customer Compliance Manager to discuss our tax affairs on a real time basis.
We take care to ensure that our tax affairs are reported accurately. We would seek to voluntarily disclose any errors found in a submitted tax return, quantifying the effect of any error and paying any additional tax, interest and penalties due as a result.
HEINEKEN is committed to paying the right amount of tax in the UK, and to work collaboratively with the tax authorities.