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Owner/Approver: Group Chief Accountant
Valid from: 24.06.2024
This document sets out the global framework for tax management and governance in the Lerøy Seafood Group (“LSG”). Tax management is an integrated part of the group's corporate strategy. The Global Tax Policy shall be in line with the corporate governance of LSG, including LSG's Code of Conduct and The Lerøy Way. LSG intends with this statement to disclose what approach the management has to ensure that LSG are compliant with all reporting and payment obligations related to statutory taxes.
This policy applies to all LSG’s legal entities, and its employees are obliged to adopt and follow the Global Tax Policy in all business activity and in all decision making.
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Overview of applicable tax framework
1. Tax Residence: LSG and its subsidiaries are subject to taxation based on their tax residence. The tax residence is typically determined by the location of a corporation's main operations, management, or the place of incorporation.
2. Corporate Tax Rates: LSG is required to pay corporate taxes at the rates set by the host country where they operate. Corporate tax rates vary across the different jurisdiction. These rates are generally applicable on the company's net profits. Some jurisdictions have special taxes in addition, as the Norwegian resource rent tax on salmon farming.
3. Double Taxation Avoidance: To avoid double taxation in case of cross-border activities, LSG benefit from tax treaties between countries. These treaties generally avoid income from being taxed twice on same source of income, either based on a tax credit method or an exemption method.
4. Transfer Pricing: Transfer pricing regulations and guidelines aim to prevent profit shifting and tax evasion through pricing of related-party transactions. This is particularly relevant for cross border transactions, but will also be relevant in national transactions, including when there are different tax schemes (such as the resource rent tax in Norway). Related party transactions shall be performed in accordance with OECD’s Transfer Pricing Guidelines for Multinational Enterprises.
5. Tax Deductions and Incentives: LSG may be eligible for tax deductions and incentives provided by the host country to encourage investment, research and development, job creation, sustainable practices, or other specific objectives. These incentives can help reduce the overall tax burden.
6. Withholding Taxes: Subsidiaries in LSG may be subject to withholding taxes on certain types of income, such as dividends, interest, royalties, or service fees. These taxes are often levied on the payment made to foreign entities and are deducted at the source.
7. Tax Credit: Taxable income in Norway may have been subject to foreign tax, including withholding taxes. Tax credit can be obtained by invoking the relevant tax treaty or Norwegian internal regulations.
8. Anti-Abuse Measures: Most jurisdictions where LSG operate have enacted anti-abuse measures to prevent tax avoidance or evasion schemes used by international corporations. These measures may include controlled foreign corporation (CFC) rules, limitations on interest deductions, and anti-hybrid rules.
Tax governance
LSG’s Board of Directors is responsible for approving this policy and further develop it in collaboration with the administration in LSG. The Audit Committee has an active role in the collaboration with the administration.
The administration in LSG is responsible to periodically review the policy in order to make sure that it is relevant and updated in terms of changes in organization and the legal environment. Changes in tax legislation, with an assumed material effect on the financial statements of LSG, are discussed with the Audit Committee.
The administration in LSG works closely with other Group Functions and Business Areas to identify, monitor and mitigate tax risks.
All LSG legal entities and its employees are obliged to adopt and follow the Global Tax Policy in all business activity and in all decision making.
Legal and Regulatory Requirement
The management of taxes in LSG shall be performed in accordance with all local laws and regulations both with regards to taxes and accounting and bookkeeping. Related party transactions shall be in accordance with OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations including, but not limited to the arm’s length principle. LSG shall ensure compliance with EU Mandatory Disclosure Rules (MDR).
Tax compliance and reporting
LSG is committed to transparency and accuracy in its tax compliance and reporting. LSG shall ensure full, fair, accurate and understandable tax calculations, reporting, filings and payment of taxes. Payable tax in LSG is paid when it is due. LSG shall ensure that financial reporting is in accordance with IFRS and LSG’s accounting principles.
Tax planning and advisory
LSG is committed to sustainable value- creation for its shareholders, other stakeholders, and the communities where it operates. LSG shall seek to adopt tax efficiency and cost optimization within the principles listed below:
· Equitable taxes shall be paid where the economic value is generated.
· LSG does not actively seek to reduce taxes through exploitation of asymmetry in rules and legislations.
· All tax management will be performed based on LSG’s commercial needs and all transactions must have a business purpose or commercial rationale.
· LSG does not operate in grey areas.
· Consideration shall be given to LSG’s social responsibility, reputation, brand as well as the expectations from its key stakeholders.
Relationship with tax authorities
LSG is committed to a constructive, professional, and transparent relationship with tax authorities, based on the concept of integrity, collaboration, and mutual trust. LSG shall respond to tax enquiries and audits in an open, honest, and responsive manner. LSG is positive to dialogue meetings with tax authorities where impact of changes in legislation and other changes to tax related matters can be discussed at an early stage rather than during retrospective audit.
Tax transparency
LSG shall maintain a principle of openness and be honest and responsive when dealing with interested parties outside LSG and society at large. LSG shall fully comply with the relevant tax transparency legislation and reporting requirements in all jurisdictions.
· All Lerøy employees within their areas of responsibility and disciplines are responsible for following the policy.
· The top management in each company is responsible for ensuring that the company has personnel with the competencies required to ensure compliance with the policy.
· The Group Chief Accountant of Lerøy Seafood Group ASA is the owner of this document, and is responsible for updates.
· The policy has been approved by the Board of Directors
· The CFO of Lerøy Seafood Group ASA has overall responsibility for the policy.