Tax Risk Strategy of the Dürr Group
Under UK tax law, we are obliged to publish our tax risk strategy. Further details can be found in the following document (only available in English).
The Dürr Group is one of the world‘s leading mechanical and plant engineering firms. As of December 31, 2016, sales equaled approximately € 3.6 billion. Business with automotive manufacturers and their suppliers accounts for 60 % thereof. Other customer segments include the woodworking industry and the mechanical engineering sector as well as the chemical and pharmaceutical industries.
It is part of Dürr’s corporate culture to act ethically in the day-to-day business life and to comply with prevailing laws. As such, Dürr has introduced a Code of Conduct applicable for all personnel employed by any Group Company, which sets out the core corporate principles (1 Dürr’s code of conduct is available here). Dürr’s tax strategy is based on and adheres to these corporate principles.
B. Tax Risk Management and Governance Arrangements
I. Risk Management at Dürr
Each entrepreneurial decision at Dürr is based on a careful and prudent assessment of the relevant opportunities and risks. This does include all risks associated with taxes, legal and compliance. Our strategy is to control and reduce risks with the aid of an effective risk management system to ensure that the opportunities clearly outweigh the risks involved.
Dürr’s Risk Management System
Dürr’s risk management system was introduced in its present form in 2008 and has been continually adjusted to meet new requirements.
Dürr’s risk management system is tailored to the mechanical and plant engineering business. It is targeted at recording, analyzing and evaluating risks systematically in a uniform process. This enables us to adopt effective countermeasures at an early stage. At Dürr, we document all specific risks of our business including tax risks to the extent that these are identifiable and specific to an adequate degree.
II. Compliance with Tax Regulations
At Dürr, we aim to be fully compliant with tax rules in the jurisdictions in which the Group Companies operate. We aim to avoid the risks of interest and penalties, as well as the loss of reputation for the company, its bodies and its employees by taking suitable internal precautionary measures.
In order to assure complete tax compliance, we have implemented an organizational instruction, which addresses the following issues:
- Name the person (s) in the organization responsible for tax matters.
- Regular reviews.
- Provide tax training on a regular basis.
- Communication of tax related facts.
- Solid documentation of facts
- Knowledgeable interpretation of tax law
C. Attitude towards Tax Planning
Tax planning is the analysis of a financial situation or plan from a tax perspective. The purpose of tax planning is to ensure tax efficiency, with the elements of the financial plan working together in the most tax-efficient manner possible.
While applying the Code of Conduct to tax planning, each transaction must have a sound legal and commercial basis. This excludes the implementation of any artificial tax scheme. Examples for such artificial tax schemes would be the absence of commercial purposes or the allocation of taxable income to locations, where no underlying activities are performed. Other examples could be the allocation of costs to locations receiving no benefits from these allocated costs and implementing financial transactions via Group Companies not having the financial means for these transactions.
D. Dealings with Tax Authorities
Tax authorities are representative of countries’ government and administration and should be dealt with in a professional, courteous and timely manner.
Local management and group tax function are seeking a good working relationship with the tax authorities. In case of unclear application of tax law, Dürr will seek proactive feedback from tax authorities in order to evaluate the risk associated within explanations of such tax law. Maintaining a good working relationship with the tax authorities will ultimately result in a reduction of risk in case Dürr has inadvertently taken an incorrect tax position.