Dyson Automotive Research and Development Ltd – Tax Strategy
Dyson Automotive Research and Development Ltd is part of the Dyson Group (the “Group”). The Group is headed by Dyson Holdings Pte Ltd and is headquartered in Singapore. The Group’s principal activity is the development of new technology and the manufacture and sale of products incorporating that technology. The Group is subject to tax across a number of countries and under different tax regimes.
2. Tax planning strategy
Dyson Holdings Pte Ltd has a documented code of conduct. Amongst the principles enshrined in it are compliance with the law and with moral obligations. All staff are required to follow these principles, including in all dealings in relation to tax. The other companies in the Group also follow these principles.
The Group ensures that all its tax obligations are met as required and seeks to ensure that tax is paid where and when it is due. Many governments offer tax incentives focused on R&D and on the development and manufacture of products which use such technology. The nature of the Group’s activities mean that it is eligible to access these government incentives.
The Group interprets tax laws in the way it believes they were intended to apply and does not seek to use the tax laws in a contrived manner. It expects tax authorities to follow the same principle.
In cross-border matters, the Group follows the terms of double tax treaties and relevant OECD guidelines in dealing with matters such as transfer pricing and establishing taxable presence.
3. Relationships with tax authorities
The Group works collaboratively with tax authorities to achieve certainty on a real-time basis, and to achieve early agreement, where possible.
Where the amount of tax due is subject to a significant degree of uncertainty, the Group actively engages with the relevant tax authorities and where appropriate seeks binding rulings as to the level of profits taxable. By working with local tax authorities, where possible in real-time through an open relationship, the Group increases certainty over its tax affairs.
Due to the complexity of tax legislation, the Group and tax authorities may occasionally have differing opinions of the treatment of certain tax items. Where this is the case, the Group works with that tax authority to reach resolution as promptly as possible.
4. Tax risk management
The Group’s risk management (which includes tax risks) is overseen by the Board, supported by the Group Audit Committee, to which the Internal Audit functions report.
The Group maintains an up-to-date register of tax risks. All material tax risks are discussed with the Internal Audit function to ensure adequate controls and processes are in place to monitor and report against such risks.
The two key tax risks, and details of how the Group manages them are:
a) Complexity and changes in legislation – The Group is subject to tax in many countries across the world, each of which has its own set of complex tax legislation. Such legislation is typically updated on an annual basis. To keep up with these changes, the Group ensures that its tax functions have access to tax updates, access to specialist training and opportunities to obtain professional tax qualifications. The Group also utilises the services of external tax advisors as and when required.
b) Compliance and reporting risk – The Group is required to meet many different tax compliance and reporting obligations across the world. If these are not complied with, the Group could suffer penalties and interest. The Group uses a combination of timetables and checklists to ensure that all compliance and reporting obligations are met in accordance with statutory deadlines.
Additionally, the risk register is reviewed and reported against as part of the UK’s annual Senior Accounting Officer certification process.
The Group’s Chief Financial Officer (CFO) is responsible for the implementation of the Group’s approach to tax. As part of the annual financial reporting process, the CFO communicates relevant information on the Group’s tax position to the Board of Directors.
The responsibility for the day-to-day management of the Group’s tax operations is devolved to the internal tax functions, which are staffed by appropriately qualified and trained employees. External tax support is sought on occasions when specialist expertise is required or when the Group wishes to seek advice on the tax position of a particular matter.
6. Total Tax Contribution (“TTC”)
The Group incurs many different tax obligations in the multiple territories in which it operates. It pays corporate income taxes, customs duty, stamp duty, employment and other taxes. Additionally, the Group acts as a tax collector for VAT/GST, employment taxes and other taxes which it then pays over to the tax authorities. The taxes paid and collected form an important economic contribution to the tax authorities in the countries in which the Group operates.
7. Further information
The Dyson Holdings Pte Ltd approach to tax is applicable to all group companies. The tax strategy is reviewed and updated annually. This document complies with the Group’s UK subsidiaries’ duty under Paragraph 16(2) of Schedule 19 of the Finance Act 2016 to publish a tax strategy in respect of the period ended 31 December 2019.
Approved by: Ruth Hopkins, Director
On behalf of Dyson Automotive Research and Development Ltd’s Board of Directors
Date: February 2020