Flügger Group – Tax policy
Accountability and transparency
Flügger intends to pay the taxes expected by legislators and mandated by law. Flügger seeks transparency and accountability in taxation to comply with applicable tax legislation and adhere to best practices in the tax field.
Flügger supports international initiatives aimed at creating the necessary transparency, including those aligned with the UN's Sustainable Development Goals related to taxation and Flügger's strategic sustainability initiatives.
Flügger aims to be transparent in taxation, ensuring that its tax arrangements remain clear and justifiable at all times.
Approach to tax
Flügger does not support nor engage in activities that, to Flügger's knowledge, involve money laundering, tax evasion, or attempts thereof. Additionally, Flügger does not establish or manage companies in tax havens as further defined on the EU's list of non-cooperative jurisdictions for tax purposes.
In cases of suspicions of tax fraud, tax evasion, as well as other unethical or illegal events within Flügger, we have a whistleblower system in accordance with EU legislation and national laws. In the whistleblower system, employees and other stakeholders associated with Flügger may make anonymous or non-anonymous reports regarding serious matters they believe warrant attention. The whistleblower system is managed by an independent party that ensures anonymity, security, and user-friendliness in the system.
Our business structures are based on commercial considerations and business substance. We do not establish artificial structures to avoid taxes. Flügger pays taxes where value is generated in accordance with OECD principles and complies with national and international tax laws.
Transfer pricing
To ensure appropriate profit allocation within the group, we adhere to internationally recognized standards such as the OECD's Transfer Pricing Guidelines ("TPG") and transfer pricing regulations set by local tax authorities.
All intercompany transactions must comply with the arm's length principle and/or local tax legislation. Intercompany agreements and transactions must always be driven by commercial rationale, and while tax implications are to be considered, they cannot be the sole driver behind commercial decisions.
Flügger's transfer pricing structure follows a principal model, with the principal entity located in Denmark. Our profit allocation is primarily determined by where value creation within the group occurs and is further distributed among administrative, production, and sales units in accordance with comparable companies based on benchmark studies.
Relationship to tax authorities
We maintain trusting and transparent relationships with tax authorities. We adhere to established procedures for the preparation and submission of required tax returns and associated documentation to tax authorities through their channels. Additionally, we respond accurately and promptly to inquiries from tax authorities.
Where there is significant uncertainty regarding the application of tax rules to our business, we seek proactive clarification on the tax treatment with tax authorities. To enhance certainty, we work towards entering into Advance Pricing Arrangements ("APA") with the relevant tax authorities, where appropriate and feasible.
Compliance with tax legislation can at times be complex, as the law allows for different interpretations or options. Where a practice for interpreting tax legislation has not yet been established, we will seek guidance from tax advisors and tax authorities. Flügger will only opt for tax solutions if it is assessed as more than 50% likely that the tax treatment can be defended in court, in the event it is challenged by a tax authority.
In cases of misunderstandings regarding facts or tax legislation, we will seek to collaborate with tax authorities, identify the issues, and explore options to resolve any misunderstandings or disagreements. In situations where we cannot resolve disagreements through dialogue with tax authorities, we will settle our disputes in tax tribunals or courts to ensure proper tax treatment.
Tax incentives
We acknowledge our obligations to our shareholders, striving to minimize costs and maximize the company's earnings. Consequently, Flügger does not pay more tax than necessary according to the law.
Tax incentives are government measures aimed at influencing corporate decision-making or encouraging companies to invest in a particular way by reducing the tax burden associated with investments.
Flügger seeks to utilize these incentives as they contribute to enabling us to produce high-quality paint in an increasingly sustainable manner. We make use of tax incentives and tax reliefs where they are applicable and in line with our business and operational targets.
Governance
Flügger's tax affairs are managed and overseen by the executive management and monitored by the board of directors. Annual reporting on taxation is provided to the board and the audit committee. The tax policy is approved by the board.
Operational tax matters are handled by the CFO and the Group Accounting team, who are involved in significant business structural changes, enabling them to assess potential tax implications of commercial business decisions.
Flügger has internal processes that contribute to ensuring compliance with applicable tax laws, continuously engaging with best practices, and maintaining consistency in tax reporting.
Flügger intends to pay the taxes expected by legislators and mandated by law. Flügger seeks transparency and accountability in taxation to comply with applicable tax legislation and adhere to best practices in the tax field.
Flügger supports international initiatives aimed at creating the necessary transparency, including those aligned with the UN's Sustainable Development Goals related to taxation and Flügger's strategic sustainability initiatives.
Flügger aims to be transparent in taxation, ensuring that its tax arrangements remain clear and justifiable at all times.
Approach to tax
Flügger does not support nor engage in activities that, to Flügger's knowledge, involve money laundering, tax evasion, or attempts thereof. Additionally, Flügger does not establish or manage companies in tax havens as further defined on the EU's list of non-cooperative jurisdictions for tax purposes.
In cases of suspicions of tax fraud, tax evasion, as well as other unethical or illegal events within Flügger, we have a whistleblower system in accordance with EU legislation and national laws. In the whistleblower system, employees and other stakeholders associated with Flügger may make anonymous or non-anonymous reports regarding serious matters they believe warrant attention. The whistleblower system is managed by an independent party that ensures anonymity, security, and user-friendliness in the system.
Our business structures are based on commercial considerations and business substance. We do not establish artificial structures to avoid taxes. Flügger pays taxes where value is generated in accordance with OECD principles and complies with national and international tax laws.
Transfer pricing
To ensure appropriate profit allocation within the group, we adhere to internationally recognized standards such as the OECD's Transfer Pricing Guidelines ("TPG") and transfer pricing regulations set by local tax authorities.
All intercompany transactions must comply with the arm's length principle and/or local tax legislation. Intercompany agreements and transactions must always be driven by commercial rationale, and while tax implications are to be considered, they cannot be the sole driver behind commercial decisions.
Flügger's transfer pricing structure follows a principal model, with the principal entity located in Denmark. Our profit allocation is primarily determined by where value creation within the group occurs and is further distributed among administrative, production, and sales units in accordance with comparable companies based on benchmark studies.
Relationship to tax authorities
We maintain trusting and transparent relationships with tax authorities. We adhere to established procedures for the preparation and submission of required tax returns and associated documentation to tax authorities through their channels. Additionally, we respond accurately and promptly to inquiries from tax authorities.
Where there is significant uncertainty regarding the application of tax rules to our business, we seek proactive clarification on the tax treatment with tax authorities. To enhance certainty, we work towards entering into Advance Pricing Arrangements ("APA") with the relevant tax authorities, where appropriate and feasible.
Compliance with tax legislation can at times be complex, as the law allows for different interpretations or options. Where a practice for interpreting tax legislation has not yet been established, we will seek guidance from tax advisors and tax authorities. Flügger will only opt for tax solutions if it is assessed as more than 50% likely that the tax treatment can be defended in court, in the event it is challenged by a tax authority.
In cases of misunderstandings regarding facts or tax legislation, we will seek to collaborate with tax authorities, identify the issues, and explore options to resolve any misunderstandings or disagreements. In situations where we cannot resolve disagreements through dialogue with tax authorities, we will settle our disputes in tax tribunals or courts to ensure proper tax treatment.
Tax incentives
We acknowledge our obligations to our shareholders, striving to minimize costs and maximize the company's earnings. Consequently, Flügger does not pay more tax than necessary according to the law.
Tax incentives are government measures aimed at influencing corporate decision-making or encouraging companies to invest in a particular way by reducing the tax burden associated with investments.
Flügger seeks to utilize these incentives as they contribute to enabling us to produce high-quality paint in an increasingly sustainable manner. We make use of tax incentives and tax reliefs where they are applicable and in line with our business and operational targets.
Governance
Flügger's tax affairs are managed and overseen by the executive management and monitored by the board of directors. Annual reporting on taxation is provided to the board and the audit committee. The tax policy is approved by the board.
Operational tax matters are handled by the CFO and the Group Accounting team, who are involved in significant business structural changes, enabling them to assess potential tax implications of commercial business decisions.
Flügger has internal processes that contribute to ensuring compliance with applicable tax laws, continuously engaging with best practices, and maintaining consistency in tax reporting.