MICHELIN TYRE PLC UK TAX STRATEGY AND POLICIES
YEAR ENDED 31 DECEMBER 2020
This statement sets out the strategic tax objectives for Michelin UK as required by Finance Act 2016, Sch. 19 para’s 19 and 22 and includes all Michelin group UK entities. It applies to the financial year ended 31 December 2020 and until it is replaced by the subsequent strategy statement in line with the Schedule 19 Finance Act 2016 legislative requirements and is Board approved.
Compliance with the Law
- The primary responsibility of Michelin in relation to taxation is to ensure compliance with all legal obligations within a framework of agreed principles. The Business must therefore be satisfied that any tax initiative undertaken by it is legal. If any of the principles expressed herein conflict with UK laws, as overridden by any relevant tax treaties, the UK local law takes precedence in terms of how the department will operate.
Strategy and Planning
- Michelin will always seek to interpret tax legislation consistently with both the spirit and intention of the law and will not seek to exploit ambiguity.
- The Business will not undertake transactions wholly motivated by tax avoidance or from which there is no economic benefit to the Business other than tax savings.
- Management shall not seek to exploit tax regimes considered to be harmful or secretive.
- Minimising Michelin’s tax liabilities by recognising appropriate legislative concessions and reliefs is of benefit to customers (through lower bills) and shareholders.
- The Business’s tax strategy and policies seek to make use of such appropriate reliefs and to control the Business’s tax costs.
- Whilst seeking to minimise tax liabilities for the benefit of customers and shareholders, the Business’s policy is not to take an aggressive interpretation of tax legislation or use artificial tax avoidance schemes.
- It is the policy of Michelin that all tax positions taken are consistent with the Business’s core values which notably include respect for all relevant facts, respect for the environment and respect for people.
- The Business should comply with documented policies and procedures in relation to tax risk management and should conduct risk assessments before entering into any new initiatives. Where appropriate, based on Management’s judgment, this should include obtaining external professional opinions to verify and support the Business’s conclusions.
- Tax is part of the Finance function of Michelin and is the ultimate responsibility of the Michelin Group’s Director of Finance, who is responsible for the Group’s tax strategy and policies. In the UK tax strategy and policies are reviewed on an on-going basis at Business board level.
- Tax strategy and policies are reviewed on an on-going basis by the Business’s Internal Audit Department and main board.
- Day-to-day tax matters are delegated to a team of qualified in house professionals.
Awareness of reputation and relations with tax authorities
- Michelin values having good relations with tax authorities. Therefore pro-active and transparent communication with tax authorities is maintained at country level to ensure that all information reporting required under taxation laws is readily available on a timely basis.
- The Michelin Group Vice President of Tax, the Regional Heads of Tax and Country Tax Managers will actively consider the implications of tax initiatives on the Business’s corporate reputation. All major tax disputes will be reported to the Business’s Managing Director at least annually. Management will also inform the Business’s Managing Director of any structure which could have a potential impact on the Business’s reputation.
Wider Contribution to the UK Economy
- To form a full view of Michelin’s tax contribution to the UK economy in a proper perspective, its overall fiscal and economic contribution should be taken into account.
- While the reporting of companies’ tax affairs most commonly focuses on Corporation Tax, other taxes, duties and contributions to the UK government are also paid by Michelin Tyre PLC. Examples are Employers’ National Insurance contributions, the Apprenticeship Levy, Business Rates, Customs Duty and Fuel Duty.
- We are a significant trader generating Government Revenues from Value Added Tax.
- We are a significant employer generating government revenues from Income Taxes and consumer spending by employees.