What is your approach to tax affairs?

Last updated: 22/12/2017
This statement sets out the approach of the UK companies of the adidas Group to their tax affairs for the year ended 31 December 2017.

The companies covered are:
  • adidas (UK) Limited
  • Taylor Made Golf Limited (1)
  • Ashworth UK Ltd (2)
  • Reebok International Limited
  • Reebok Europe Holdings
  • Reebok Pension Management Limited
  • RBK Holdings Limited
  • Refuel (Brand Distribution) Limited (3)
  • Luta Limited
  • Trafford Park DC Limited
(1) Taylormade Golf Limited sold during 2017
(2) Ashworth UK Ltd sold during 2017
(3) Refuel (Brand Distribution) Limited sold during 2017

This statement is intended to comply with the requirements of Schedule 19 of the Finance Act 2016 with regard to the above companies.

The above companies are sportswear sales, marketing and distribution companies. Activities include wholesale, retail and eCommerce sales and Reebok International Limited is also the global owner and marketing company for the Reebok brand.
 
The above companies employ 1,338 people across the UK; offices are based in Stockport and London along with a distribution centre in Trafford. 29 retail stores are also present across the UK.
 
The group company structure is such that they report into an overseas parent namely adidas AG based in Herzogenaurach, Germany. Within this set up the above companies adopt a transfer pricing policy which is in line with OECD guidelines and has been reviewed by HMRC.
 
Where taxable losses exist, the above companies utilise group relief for corporation tax.
Alongside Corporation Tax we also pay taxes in line with all requirements for VAT, customs duties, employer’s national insurance contributions, excise duties, business rates and other indirect taxes. Furthermore, the above companies also pay environmental taxes such as the carbon commitment energy efficiency tax.

The above companies’ approach to tax is in line with group strategy and interact closely with global HQ to ensure robust governance and controls procedures.
 
1. Commitment to compliance
 
The above companies are fully committed to their compliance with all the requirements of UK tax law and practice. This entails meeting all legal obligations and making all appropriate tax returns and payments. It also entails full disclosure of relevant facts and circumstances to the UK tax authority and claiming the proper reliefs and incentives where available.
 
2. Responsible tax arrangements
 
It is the policy of the above companies to ensure that the tax profile of their activities is fully aligned with the substance of the operating structures of their businesses. Accordingly, all their transactions will have commercial and economic substance and they will not put in place arrangements that are contrived or artificial. This extends to transactions with other members of the adidas Group elsewhere, which transactions are to be carried out on an arm’s length basis and to reflect OECD guidelines.
 
3. Management of tax risks
 
Given the range of activities carried out by the above companies, there are risks relating to the correct interpretation of tax legislation and to the effective recognition of tax liability. The responsibilities of the Senior Accounting Officers of the companies and their finance and accounting staff include the identification, evaluation, correction and monitoring of such risks. To that end, as additional reassurance, strong relationships are maintained with outside professional tax advisors, internal advisors within the adidas Group Taxes department and HMRC to whom referral is made whenever required.
 
4. Relationship with HM Revenue & Customs (“HMRC”)
 
The above companies seek an open, fair and cooperative relationship with HMRC. They fully respond to information requests, whether informal or formal, and take the initiative in communicating business developments of particular significance for purposes of UK taxation. To make this relationship as effective as possible, the interaction is between the Senior Accounting Officers of the companies and HMRC rather than the companies’ professional tax advisers.
 

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