Konica Minolta Marketing Services Group Tax Strategy
This paper sets out the tax strategy of The Konica Minolta Marketing Services Group (“Group”) and its UK subsidiary undertakings (the “Group”) for the year ending 31 March 2017, and in making this strategy available the UK Group is fulfilling its responsibilities under Schedule 19 of the Finance Act 2016.
This tax strategy applies to all UK taxes applicable to the Group and the document is owned by the Board of Directors of Group (“the Board”).
This document will be reviewed annually, updated as appropriate and approved by the Board. The Board is responsible for setting and monitoring the strategy. The Finance Director alongside with the Taxation Manager of the Group are accountable to the Board for the implementation of the tax strategy and the management of tax and related risk.
1. Group’s introduction
Although the Group has also its overseas presence in 24 European countries, trading in the UK forms substantial part of group’s revenues.
The Group is headed up by UK incorporated holding company Konica Minolta Marketing Services EMEA Limited, a subsidiary of Konica Minolta Business Solutions Europe GmbH. The Group is ultimately controlled by Konica Minolta Inc., incorporated in Japan and listed on the Tokyo stock exchange.
The principal trading companies in the Group are the below companies, both incorporated and tax resident in the UK
- Konica Minolta Marketing Services Limited (involved in outsourcing of specific marketing processes, mainly print management and artwork design services) and
- Indicia Limited (acting as communications agency).
2. Managing tax risks
Effective risk management is paramount for the Group and underpins its business strategy. The Group’s ongoing approach to UK tax risk management and governance is based on the principles of reasonable care and materiality, while considering both financial and non-financial factors.
We acknowledge the importance to compliance with tax regulations and treat the management of tax risks seriously. Consequently, we maintain on-going application of tax governance with strong internal controls in order to substantially reduce tax risk to materially acceptable levels.
As part of this governance, we have a taxation manager who oversees the Group’s accounting processes alongside with its business focus, assess its compliance with the ongoing tax regulations and escalate any identified risks to the management team with the aim to find effective solutions with due care. Also, significant tax issues including substantial tax risks are subject to regular discussion within the senior finance team and the important agenda also brought to the attention of Board. The identified risks are maintained on tax risk registers, and their materiality is evaluated regularly.
We are aware of complexity of tax matters and with the aim to comply with all tax requirements, the tax and payroll compliance is partially outsourced with professional third party providers, which help us to keep the tax processes up-to-date.
3. The Group’s attitude to tax planning
The Group’s attitude to tax planning reflects the aim to achieve to efficient and appropriate tax structure that corresponds with our business activities, ensuring the appropriate tax payments and reporting. Where necessary, 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 also recognize the importance of transfer pricing as being arm’s length and as a means of ensuring tax payments are made appropriately to locations that contribute value and is committed to ensuring compliance with tax regulations and the related requirements for the timely filing of tax returns and the making of tax payments.
As part of wider Konica Minolta group we have a responsibility to minimize our tax risk and our exposure to negative publicity through non-compliance. This means that the Group under no means understands tax planning as engaging in artificial transactions of which the sole purpose is reducing the UK tax. Also, we do not abuse tax havens as a method of tax evasion and act with a resolute mindset to be a responsible tax payer.
4. The Group’s tax risks
The Group’s strategic aim is to maintain the low UK tax risk rating as determined by HMRC’s Business Risk Review process.
The Group seeks to achieve this aim through:
- submission of all UK tax returns on a timely basis,
- upon request provide any sufficient detail or explanation in order to enable HMRC to form an accurate view of the affairs of the company filing the return with an adequate supporting audit trail,
- paying the appropriate amount of tax at the right time,
- ensuring all tax filing positions are supported with appropriate documentary evidence,
- ensuring that the Group’s departments which are involved in the tax processes are adequately resourced, supported and that key personnel are retained in order to manage tax compliance issues on a timely basis,
- seeking for tax advice where any issue may arise material risk that cannot be solved by using internal tax resources,
- maintain tax accounting arrangements which are robust and accurate and comply with the Senior Accounting Officer (SAO) provisions in the UK.
5. Working with HMRC
The Group will comply with all relevant legal disclosure and approval requirements and all information will be clearly presented to HMRC as appropriate.
In its dealings with HMRC, the Group will act in an open, honest and transparent manner. The Group’s strategic aim is to avoid unnecessary disputes with HMRC and thus minimize tax risk.
We aim to achieve this through mainly by
- outsourcing the complicated tax compliance matters to professional consultants
- seeking for assistance of professional tax professionals acting as our agents in dealings with HMRC,
- making the tax compliance procedures and controls available for review by HMRC upon request
- where appropriate, seeking pre-transaction clearances from HMRC.