UK Tax Strategy
Year Ended 31 December 2022
Prepared in accordance with the requirements of Schedule 19, Finance Act 2016.
We believe in responsible tax behaviour as an essential part of our sustainability strategy. The taxes we pay contribute 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.
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 (part of the Supervisory Board). Our tax strategy is based on a number of key principles:
- Our commitment to comply with relevant tax laws and international regulations, we aim to comply with the letter as well as the spirit of the law.
- Our way of working conforms with the HEINEKEN Code of Conduct.
- We developed co-operative compliance relationships with tax authorities in various countries. For the UK, this is HM Revenue & Customs.
- We fully support and follow the OECD transfer pricing guidelines. Transactions between HEINEKEN companies are conducted at ‘arm’s length’.
- We report taxes based on international (IFRS) and local reporting standards.
HEINEKEN operates in more than 70 countries around the world and is subject to diverse tax legislation. Tax legislation is often complex and subject to interpretation, meaning expert understanding and careful judgement is key. Failure to comply with applicable regulations could lead to fines, claims and reputational damage.
Our tax principles provide guidance on exercising judgement and ensure consistent understanding of HEINEKEN’S position on risk.
HEINEKEN’s risk management system enables management to identify, assess, prioritise and manage risks on a continuous and systematic basis, and covers all subsidiaries across regions, countries, markets and corporate functions.
Within this context, the HEINEKEN Tax Control Framework (HTCF) is at the heart of our tax governance model and comprises all our tax standards, procedures and controls.
The objective of HTCF is to provide a reasonable level of assurance that HEINEKEN is in control of all taxes and duties borne and collected by the HEINEKEN group. In addition, the HTCF aims to provide verifiable assurance that the tax risks of HEINEKEN are identified and managed in compliance with applicable laws and regulations. The HTCF results in greater transparency of the tax management function and complying with the HTCF may form a solid basis for an open and transparent relationship with tax authorities.
HEINEKEN makes use of an online tool to monitor compliance of all HEINEKEN companies with the HTCF. Relevant standards, procedures and good practices are shared among HEINEKEN’s tax function and periodic control assessments are performed.
Risk appetite and attitude to tax planning
We use business structures that are driven by commercial considerations, reflect commercial and economic activity and have genuine substance. We do not engage in artificial tax arrangements.
Compliance with applicable tax laws and regulations is our overriding principle. We aim to comply with the letter as well as the spirit of the law. Where there is significant uncertainty or complexity in the tax legislation, we seek advice from external experts to be confident that our tax returns are correct. We engage in efficient tax planning that supports our business and reflects commercial and economic activity. We do not engage in artificial tax arrangements. Our overriding principle is compliance with all applicable tax laws and regulations.
HEINEKEN is not prepared to accept a level of risk that would expose it to reputational harm, and we would only adopt tax planning where there is commercial substance, and we believe it is more likely than not that our position would be upheld.
We interpret UK tax law in a reasonable manner taking into account both the purpose and intent of the law. Where there is significant uncertainty or complexity in relation to tax, we may seek advice from external experts. This gives us confidence that our tax returns are correct.
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.
HEINEKEN operates in a relatively decentralised business model, in which every country organisation maintains a certain level of control over the entire value chain, within the framework and principles determined by the Group.
Ultimate responsibility for tax matters rests with our Executive Board and Audit Committee (part of the Supervisory Board) who review and approve HEINEKEN’s tax strategy annually set by the Senior Director Global Tax.
The Senior Director Global Tax is also responsible for managing the Tax Function. With the support and monitoring of the Global Tax department, the local Tax Managers execute the Group’s tax strategy under the supervision of the local Finance Directors.
The UK Head of Tax reports to the UK Finance Director. The UK Head of Tax is responsible for all taxes which impact the HEINEKEN UK corporate group, with the HR department having day to day responsibility for employee taxes. The HEINEKEN UK tax team members are suitably trained and experienced to deal with administration of the other taxes. The input of suitably qualified external advisors is a key source of expertise to supplement the skills of the HEINEKEN UK tax team. External advisors are therefore used when required on specialist matters.
HEINEKEN UK carries out an assessment on an annual basis against the HEINEKEN Tax Control Framework to identify any potential improvements that could be made regarding tax risk management.
We do not condone, encourage or support tax evasion. Any ethical and compliance concerns may be raised through HEINEKEN’s Speak Up channels. When facing a conflict, employees are bound by the Code of Conduct.
The approach towards dealings with HMRC
We seek to develop strong relations with HMRC based on respect, transparency and trust. We are committed to a collaborative approach to 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.
Updated on 16 December 2022.