INDICATOR: 11.21.5
Tax governance, control, and risk management
Α) A description of the tax governance and control framework, including:
i. the governance body or executive-level position within the organization accountable for compliance with the tax strategy;
ii. how the approach to tax is embedded within the organization;
iii. the approach to tax risks, including how risks are identified, managed, and monitored;
iv. how compliance with the tax governance and control framework is evaluated.
B) A description of the mechanisms for reporting concerns about unethical or unlawful behavior and the organization’s integrity in relation to tax.
C) A description of the assurance process for disclosures on tax and, if applicable, a reference to the assurance report, statement, or opinion.
A. Description of the tax governance and audit framework, including:
i. Day-to-day management of tax and customs matters rests with the Group Tax & Customs Director and local experts, if required, to identify and manage tax risks according to Group policies and to monitor changes in the tax framework. Following tax assessment of all issues and any potential tax impact to the Companies, the GT&CD takes any necessary measures. The Group Tax & Customs Director reports to the Group Chief Finance Officer (‘CFO’), who reports to the Chief Executive Officer (‘CEO’) of the Group, reporting to the Board of HELLENiQ ENERGY Holdings SA, being the parent company of HELPE RSSOPP.
ii. GT&CD provides expert opinions within the Group and tax clearance through analysis from a tax and/or customs perspective. It acts as tax & customs internal consultant for the group, examining all issues, following up with all legislation and keeping updated all stakeholders on a timely basis, ensuring tax awareness within the Group.
Through high professional standards, GT&CD seeks to ensure payment of taxes when due, in line with the clear and firm intention to be in full compliance with all tax legislative requirements. We achieve this by:
- acting with integrity, full transparency and optimization of the relevant resources;
- meeting statutory obligations/deadlines;
- providing training and guidance within the Group, acting as internal tax and customs advisers considering the link between tax strategy, business strategy, and development.
iii. We do not engage in any aggressive tax planning across the HELLENiQ ENERGY Group, always taking into consideration our corporate values and codes. We take a conservative approach to tax risk and we strive to keep tax risk at the lowest level. Maintaining compliance is paramount and we aim to comply with both the spirit and letter of the law in regard to our tax affairs.
Where risks are identified, we ensure appropriate action is taken to mitigate those risks, when required and reduce the level of risk to an acceptable minimum. If required, we use external advisers to provide tax technical advice, legal expertise and additional resources based on an assessment of risks and requirements.
We follow generally accepted risk management principles and best practice, that are applied to tax and we ensure the right communication, integration and adaptation of these principles across the organization.
iv. There are various reporting/audit tools, according to the relevant provisions, to evaluate and follow up compliance and control from a tax perspective within the Group.
Tax Certificates
All Greek companies falling within the ambit of the relevant process, are annually undergoing specific audit process by their statutory auditors, obtaining unqualified Tax Certificates, confirming tax compliance for the Group companies, without material or immaterial tax findings reported. In 2021 the relevant tax certificates, were issued for 50 Greek liable entities.
Transfer Pricing files – Local TP files per entity/country are prepared annually. Intra group transactions are closely monitored using additional valuation through benchmarking analysis. In 2021, 47 relevant files were prepared.
HELLENiQ ENERGY Group TP Masterfile is in line with guidance provided under the OECD Guidelines and the Greek TP rules aiming at achieving consistency with the said framework.
The Masterfile provides a high level overview of the Group’s business, operations and intercompany transactions (ICTs) and aims to place the Group’s TP policies in their global economic, financial and tax content and it is shared with the Group’s affiliates abroad.
External advisors perform a thorough review and supporting to the Group during the update of the informative sections of each Local TP file, which provides an overview of the relevant affiliates, as well as an analysis of the functions, risks and assets (tangible/intangible) that are relevant to the ICTs of each relevant affiliate and how such functions, assets and risks are allocated between the affiliated counterparties.
International TP files, are submitted in each local language, while they are also prepared in English, to facilitate review at corporate level.
Country by Country Reporting – The Group timely prepares and submits annually the CbCR tables with the intragroup transactions to the Greek Tax Authorities (since the Parent entity of the Group is incorporated and resident in Greece) within the CbCR process and depicts the relevant data for the Group. In 2021 the relevant report refers accordingly to 10 countries/jurisdictions and 78 entities.
The information contained in the CbCR reflects the guidelines so far provided by the OECD and the Greek authorities in this regard and is in line with those submitted every year.
The relevant CbCR notifications are submitted in each jurisdictional authority on an annual basis. All relevant ratios and data are consolidated at a country level.
Changes in the applicable relevant laws providing internal guidelines for all entity and functions, is closely followed up.
Β. Description of reporting mechanisms on unethical or illegal conduct and the integrity of the organization in relation to taxation
GT&CD shall ensure that appropriate measures are taken to mitigate tax risks when required, and to reduce the level of risk to a minimum. If required, external advice is sought as well as additional resources based on the assessment of risks and requirements.
To date, no examples of unethical or illegal behavior, particularly in relation to tax and/or customs matters, have been identified to date to report.
C. Description of the assurance process for tax disclosures and, where applicable, reference to the assurance report, statement or opinion
We have developed suitable controls and processes to ensure these are met accurately and on a timely basis:
- If any unintentional error in tax is identified, we seek to take any corrective action at the earliest opportunity and
- We respond with full disclosure and integrity to any enquiries from Tax and/or Customs Authorities on a timely basis. All main / significant tax and customs issues are disclosed in the Financial Statements notes, which are also cleared by the certified auditors of the Group.