Tax Strategy

In accordance with Part 2 of Schedule 19, Finance Act 2016, TUV SUD (UK) Limited (“the company”), being the head company of the UK sub-group (“the UK group”) of TUV SUD AG, sets out below the UK tax strategy for the UK group as at the financial year ending 31 December 2019.

TUV SUD AG is headquartered in Munich, Germany and is one of the world’s leading technical service organisations. TUV SUD AG employs over 24,000 people who operate from over 1,000 locations worldwide.

TUV SUD AG has in place a published Code of Ethics which every employee is provided with. This Code of Ethics is binding on all global employees, including those operating in the UK and ensures that TUV SUD AG undertakes its business activities lawfully, ethically and with integrity. The UK group tax strategy is underpinned by the principles set out in the TUV SUD AG Code of Ethics.

In the UK, TUV SUD AG operates via the following UK companies:

• TUV SUD (UK) Limited
• TUV SUD Services Limited
• TUV SUD Limited
• TUV SUD BABT Unlimited
• Global Risk Consultants Limited

We are committed to a tax strategy that is both open and compliant. As part of a large multi-national group we recognise the importance of being transparent regarding the taxes we pay.

Our tax contribution goes significantly beyond the corporate tax paid by the group on its profits. As a large employer, we pay a significant amount of payroll taxes, in addition to operating as a collector of taxes through the PAYE and VAT systems.

Our business has a strong focus on corporate responsibility, and we see responsible administration and payment of taxation as a responsibility of our business.

Our overall tax strategy is to:

• Meet all legal requirements and to make all appropriate tax returns and tax payments.
• Consider the tax impact in major or complex business decisions, for example acquisitions and contracts in other jurisdictions.
• Operate in an environment where we consider tax in the context of our reputation and brand.
• Comply with appropriate tax risk processes and ensure there is Board oversight into this compliance.

Risk management and governance arrangements

We want our tax affairs to be transparent and compliant with tax legislation, and recognise that managing tax compliance is increasingly complex. Our internal structure is set up to ensure:

• The Board of directors understand the importance of tax compliance and how it is achieved.
• There is a constant dialogue between the Board and those individuals tasked with the operation of our finance function regarding the way our business manages its tax risk.
• There is regular dialogue between our finance function and key members of management responsible for managing elements of our business on a day to day basis regarding managing tax risk and the importance of meeting our obligations under UK law.
• The business portrays a positive view towards tax compliance and the importance of meeting our obligations.

We keep under review how we meet our tax obligations, be it seeking external tax advice, investing in tax training for our staff and also how we manage our relationship with tax authorities.

Tax planning

We undertake tax planning as part of our overall business strategy. We manage tax risks and costs associated with any commercial transaction, in the same way as any other cost. Tax will be driven by the commercial outcomes of any transaction, with consideration given to the need for tax efficiency and our understanding of the tax laws and practice applicable at the time. Professional advice is sought on a transactional basis, with the depth of such advice being driven by our assessment of the risk presented by each opportunity.

We do not undertake aggressive tax planning or enter into artificial arrangements, the sole purpose for which would be obtaining a tax advantage. We have a responsibility to minimise our tax risk and our exposure to negative publicity through non-compliance.

Attitude towards risk

The Board sees compliance with tax legislation as key to managing our tax risk. We understand the importance of tax in the wider context of business decisions and have processes in place to ensure tax is considered as part of our decision making process.

We have relationships with professional advisers that allow us to seek expert advice on specialist areas of tax. Our approach is to ensure we are compliant and understand our responsibilities with regards to tax, rather than looking for ways to aggressively avoid payment of tax.

The level of tax risk we are prepared to accept in relation to UK tax is consistent with our objective of achieving certainty over our businesses' tax affairs. The Board is conscious of the hugely negative publicity attracted by a bad attitude towards tax, and sees strong internal processes and a good relationship with our professional advisors as the best way to manage this reputational risk.

Relationship with HM Revenue & Customs (HMRC)

Our communication with HMRC is focussed around timely tax compliance, for example meeting relevant filing and payment deadlines for taxes the company pays.

We employ the services of professional tax advisers to act as our agents and in a number of cases they liaise with HMRC on our behalf. This is seen by the Board as a way to ensure we get the most out of our relationship with HMRC, thereby reducing our tax risk.