Pilot Pen Company (UK) Ltd – Tax Strategy

Background

This document sets out the tax strategy for the Company which is the sole distributor of Pilot products in the UK and the Republic of Ireland for the financial year ending 31 December 2018. The Company is a wholly owned subsidiary of the Pilot Corporation of Japan.

The policy is explained according to three key areas :

Governance

  • Group policies are updated regularly and published to subsidiary entities as part of J-SOX requirements. The group conducts annual audits of the UK Company’s compliance with the policies, and the results of those audits are shared with the auditors of the wider group and the board in Japan.
  • The Senior Accounting Officer (SAO) advises the board of their responsibilities with regard to all matters of reporting and compliance and the Company takes advice from appropriate professional tax advisors on a regular basis as well as undergoing an annual audit of its financial statements. The Finance department of the business is staffed by employees with considerable experience in, and up to date knowledge of tax matters.

Tax Strategy

  • The Company will calculate and pay all taxes due respecting established legal frameworks and with regard to its duties under the UK taxpayers charter.
  • The Company will not set out to under or over value it’s tax assets or liabilities and will avoid where possible, creating such items on a deferred basis.
  • The Company will not set out to construct or arrange financial transactions with the sole or prime purpose of avoiding tax and will not consider any transaction which could be regarded as tax evasion.
  • The Company will seek to contribute appropriately to wealth creation and the costs of governance in the territory in which the significant majority of its operations are located, by declaring and paying all of its taxes on time and paying all employees at rates above the national minimum wage (NMW).
  • The Company will seek advice when considering new schemes or interpreting updated legislation which could be through direct contact with the tax authority and/or taking input from a qualified professional tax advisor.
  • The Company will make available to the relevant tax authority any information they reasonably require to enable their officers to fully understand how, when, and why we have processed and reported transactions in any particular way.
  • Where officers of the Company identify errors or omissions on our part, we will not seek to hide them from our board or the tax authorities. We will fully disclose both the nature of the issue, its implications and any proposed corrective treatment to the board and the tax authority in a timely fashion.
  • The Company will use measures to ensure no single board member retains a monopoly on information regarding tax matters. This will be done by ensuring that at least one other director of the Company is apprised of the information and the Company’s auditors have full access to all communications with the tax authorities.
  • The Company will negotiate pricing and terms at ‘arms length’ with major suppliers on a minimum of an annual basis.

Relations with Tax Authorities

The Company has a clear understanding of the various authorities whose requirements it must comply with, and seeks to provide those stakeholders with a consistently good level of service. We will do this by :

  • Responding to all enquiries in a timely, truthful and complete manner.
  • Arranging, resourcing and dealing with compliance visits or audits in a timely,truthful, courteous and complete manner.
  • Completing all relevant returns and making all necessary payments of tax in line with all due dates.
  • Being honest and open and admitting errors or omissions on our part.
  • Using the resources the tax authorities make available to us to avoid wasting their time.
  • Communicating with the tax authority to request guidance and/or approval for any tax planning activity which the Company is considering for future use and where the tax authority guidance is not clear.

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