UK Tax Strategy
Keppel is a multi-business group engaged in diversified businesses in more than 20 countries. Guided by our Core Values and Code of Conduct, and as part of our ongoing efforts to maintain good corporate governance and risk management, Keppel is committed to observing all applicable laws and regulations, including the tax laws of jurisdictions where we operate.
This published tax strategy covers the UK subsidiaries of the Keppel Group, which presently include Keppel Seghers UK Ltd and Keppel DC Development Europe Ltd, for all UK taxes and duties. It sets out our approach towards conducting our UK tax affairs, and satisfies our obligations under the UK Finance Act 2016 for the period ending 31 December 2018.
Approach to tax risk management and governance
The governance of our Group’s tax strategy is overseen by the Group Tax function which reports to the Chief Financial Officer. The Group Tax team is comprised of appropriately qualified and experienced personnel who keep abreast of tax developments and updates through continuous professional development. The tax team monitors and maintains oversight of the Group’s tax matters by regularly collaborating with, and closely supporting, the business and finance teams, as well as other internal stakeholders on various tax planning initiatives and tax compliance matters. This ensures that due care and professional judgment is exercised by skilled personnel when the Group’s tax matters are dealt with. As and when required, external tax advisors are engaged to provide their professional advice and assistance on these tax matters. In this way, the Group’s tax issues are attended to, and tax risks are managed, in both an appropriate and timely manner. Furthermore, as part of our governance process, risks which have been identified are regularly communicated and feedback to the appropriate levels of higher management.
We ensure that the latest tax developments and international best practices are considered when we implement our Group’s tax strategy and tax risk management initiatives. Specifically, we manage our UK tax risks by:
• Meeting the applicable UK tax requirements and among others, ensuring that all tax returns are accurate and tax payments are made on time in the UK, through the use of external tax agents.
• Ensuring that we conduct our UK tax affairs in a manner that is consistent with our Group’s values and corporate social responsibilities.
• Making sure UK taxation is appropriately considered as part of the cost in any decision-making and approval process for all major business and operational decisions undertaken.
Level of acceptable tax risks
Our UK tax strategy seeks to support our Group’s strategy and the way we do business by ensuring that we pay the right amount of taxes which are legally due in the jurisdictions where we conduct our activities. In practice, it is a challenge to mitigate all tax risks arising from our business operations. But nevertheless, we continuously attempt to keep the tax risks low, even as we align with the broader commercial objectives. To this end, we avoid tax positions that could lead to excessive tax risks.
Attitude towards tax planning
When we conduct commercial transactions and implement business arrangements or structures, we seek to comply with the relevant tax laws. Where there is tax uncertainty or complexity, we will work with professional tax advisors to mitigate the tax risks, and ensure we do not breach any tax laws. We do not pursue aggressive tax plans and we will seek clearance or obtain rulings from the HM Revenue & Customs (HMRC), where required. We will apply for incentives and reliefs, where appropriate, to reduce our tax costs and achieve tax efficiency. However, we avoid such measures if they lead us to breach the intent of any law or regulation.
Approach towards dealing with HMRC
We have had limited engagement with HMRC in the past and they have been largely confined to our tax reporting and compliance requirements in the UK. However, as the business environment evolves, leading to new tax issues and complexities, we are committed to engaging with the HMRC in an open and transparent manner should the opportunities arise. We will adopt a proactive and co-operative approach to resolve any tax issues in a timely manner.
As both the business and tax environments are evolving, we will regularly review and update our UK tax strategy to ensure that it keeps up with the changes and enable us to effectively mitigate our risks.