Our view on taxes
7 December 2022
Introduction
This strategy applies to Canon Europa NV and all UK entities in its group. References to “Canon Europa” are to all UK companies and permanent establishments within the Canon Europa NV group.
Canon Europa is part of the multinational group Canon Inc which is headquartered in Japan.
Canon Europa is guided by the same principles as Canon Inc and follows the Group Code of Conduct.
Canon Group Code of Conduct and Principles
Canon has adopted as its corporate philosophy the concept of “kyosei” which can be translated as “living and working together for the common good”, and its basic management policy is to contribute to the prosperity and wellbeing of the world while endeavouring to become a truly global company group that thrives on excellence and posts a record of continued corporate growth and development.
Canon believes that, as a multinational corporation with operations spanning the globe, the proper payment of taxes in the countries and regions where it operates is one of its most fundamental and important social responsibilities.
Accordingly, Canon abides by the following principles with regard to tax matters.
- Pay taxes in accordance with tax related laws and ordinances
- Ensure that tax accounting and other related processes are carried out unfailingly, according to law
- Develop tax-related governance systems and work to raise awareness about tax compliance
- Adhere to common international rules on international taxation (guidelines set by the Organisation for Economic Co-operation and Development and the United Nations) and ensure that actions are in compliance with the tax laws of each country
Risk Management and Governance Arrangements
The Europe Middle East and Africa (EMEA) Tax Function with responsibility for UK taxes is based in the UK and the Netherlands. The EMEA Tax Function is led by the EMEA Tax Director who reports to the Canon EMEA CFO. This Tax Strategy is approved and owned by the Board of Canon Europa NV.
The EMEA Tax Function aims to ensure compliance with all tax legislation in the regions it operates and is also responsible for providing guidance and support on technical matters. This applies specifically to cross border issues, business model and legal entity restructuring where it is acknowledged that tax risks may arise. We actively seek to identify, evaluate, monitor and manage these risks to ensure they remain in line with our objectives. Where there is uncertainty or significant complexity external advice is sought as appropriate. In this way the EMEA Tax Function can ensure that any tax issues within the UK and throughout the wider region are managed appropriately. It also ensures that all tax issues are correctly treated for tax accounting purposes and to ensure complete reporting to the external auditors.
Attitude to Tax Planning and Level of Risk
Canon Europa manages its tax affairs with the aim of achieving certainty and avoiding any surprises. We do not undertake transactions without clear underlying commercial purpose. We do not use artificial structures or seek to transfer profits to low-tax jurisdictions.
In structuring our commercial activities, tax will be considered to ensure compliance and certainty as far as possible. Within the UK we may utilise available tax incentives and reliefs to minimise the tax costs of our business activities. These will be applied in the manner in which intended by HM Revenue and Customs and we will seek external advice if appropriate.
Where Canon Europa entities interact with each other and with other Canon entities we aim that transactions are undertaken at arm’s length. If transactions are cross-border then we will look to reduce the risk of double taxation in accordance with the available reliefs offered through the tax treaty network.
The EMEA Tax Function maintains a strong level of tax education and awareness and follows the latest developments such as the OECD/G20 Base Erosion and Profit Shifting Actions which aim to ensure that profits are taxed where economic activities generating the profits are performed and where value is created.
Relationship with HM Revenue and Customs and other authorities
Canon Europa has an open, honest and constructive relationship with HM Revenue and Customs. We work to maintain our low risk relationship by entering into dialogue with the relevant tax personnel when issues arise in real time or where a complex interpretation of the law may require clarification. We attend meetings with HM Revenue and Customs to provide business updates on the UK entities and the wider EMEA group.
Canon Europa aims to make full, accurate and timely disclosures in tax returns for all UK taxes. If inadvertent errors arise these will be corrected as soon as practicable after identification.
As well as maintaining a good relationship with HM Revenue and Customs, Canon Europa will also engage, via representative bodies, with governments and organisations on proposed changes to international standards where appropriate.
The above Tax Strategy is intended to comply with Schedule 19, paragraph 19 to the Finance Act 2016. References to “tax” for UK purposes are those contained in Schedule 19, paragraph 15 to the Finance Act 2016.
This Tax Strategy is approved and owned by the Board of Canon Europa NV.
This strategy applies from the date of publication until it is superseded.