CellMark Group Tax Strategy
The strategy has been prepared by the CellMark Group Accounting and has been approved by the CFO and CEO of CellMark Group.
June 1, 2022
The CellMark Group’s Tax Strategy has been created to articulate and communicate their worldwide tax strategy and strategic tax objectives. The CellMark Group will publish their Tax Strategy on the CellMark website to be able to inform a wider range of stakeholders. This is anticipated to fulfil policy disclosure requirements in the territories where the CellMark Group operates.
The CellMark Group’s approach to tax seeks to align with the long-term interests of all its stakeholders, including employees, governments, and communities. We also note an increasing amount of regulations applicable to the CellMark Group in addition to our own continuing growth in size and complexity. This requires a reliable, centralized, and formalized internal tax function.
This tax strategy satisfies paragraph 19 of schedule 19 to the UK Financing Act 2016. A list of the UK entities to which it applies is set out in Appendix 1 below. The tax strategy has been published in accordance with paragraph 16(2) of the Schedule by CellMark AB (hereinafter “CMAB”) as the Head of the CellMark Group.
This strategy applies from the date of publication until it is superseded. References to “UK taxation” are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax, and Stamp Duty Land Tax. References to “tax”, “taxes” or “taxation” are to UK taxation and to all corresponding worldwide taxes and similar duties in respect to which the Group has legal responsibilities.
This tax strategy is applicable to all companies that are controlled by CMAB.
The tax strategy and our strategic objectives encompass a range of taxes including for example, corporate income tax, indirect taxes, employment taxes and similar levies applicable to the CellMark Group.
1.3 Ownership and audience
This document is owned by the CellMark Group’s accounting department (hereinafter “Group Accounting”), which reports directly to the CFO. The strategy is reviewed and approved by the Vice President Accounting (hereinafter “VP Accounting”), CFO and CEO on an annual basis, as part of their responsibility for the CellMark Group’s tax position.
The strategy is supported and reinforced by Group Accounting, the central Vice President ESG and Compliance (hereinafter “VP ESG & Compliance”), and Divisional Presidents supported by Local Managing Directors (“MDs”) of the CellMark Group’s companies, who are fully involved in and responsible for compliance with local tax legislation.
2.1 Company overview
The CellMark Group (hereinafter also referred to as “CellMark” or “the Group”) is headquartered in Gothenburg, Sweden, and the Group consists of subsidiaries and rep offices located worldwide. CellMark is a leader in international trade and business development for the global industry. The company offers services in sales & marketing, finance, logistics, customer service, regulatory & compliance, custom manufacturing, and R&D.
With a network of more than 70 offices in over 30 countries, we run six successful international divisions in Pulp, Paper, Packaging, Recycling, Chemicals and Basic Materials. We have also grown operations for Plastics and Biomass for energy. A key element in the CellMark Group is its large and profound global network of supplier, customers, shipping and forwarding companies, international banks and insurance institutions among others. The diversity of CellMark’s resource platform enhance the business relationship and makes it possible for the CellMark Group to act as a full service provider.
2.2 Tax Risks
Since the CellMark Group has a network of more than 70 offices in over 30 countries, the Group is exposed to a variety of tax risks. The identified risks are described in more detail below:
- Tax compliance and reporting risk: Covers risks associated with compliance failures, such as submissions of late or inaccurate income tax returns, the failure to submit claims, failures to comply with local rules and regulations, failure to maintain sufficient systems and controls in place to support tax compliance and reporting requirements.
- Transactional risks: arise where transactions are carried out or actions are taken without appropriate consideration of the potential tax consequences or where advice taken are not correctly implemented.
- Reputational risks: the risk that non-compliance with local tax rules and regulations will impact our relationships with stakeholders, clients, tax authorities, partners, and the general public.
Our tax management strategy is described in the tax policy statement below.
2.3 Tax Strategy Statement
Our goal is to take care of our stakeholders, to nurture a growing trust and generate more and better business. By following our values and implementing our objectives stated below, we will be able to achieve our mission for tax.
Operate in a manner that demonstrates strong integrity
The CellMark Group will meet its legal obligation to pay the correct amount of tax due in relation to its business activities and model. The CellMark Group strives to comply with its tax filing, tax reporting, tax payment and other tax obligations globally, in accordance with applicable regulations and requirements.
We act firmly to avoid engagement in any tax planning that may harm the CellMark Group’s business operations, reputation, or stakeholders. We are working hard to achieve strong commercial results and ensure our future existence for the next generation. We will therefore operate within the letter and the spirit of the law.
Ensuring a high standard of corporate governance
The level of risk appetite that the CellMark Group is willing to accept in relation to UK taxation is consistent with its overall objective of achieving certainty in the Group’s tax affairs, which is approved and communicated by CMAB’s Board of Directors. This also defines how we approach tax management and the mitigation of our tax risks. Our tax control framework ensures that ongoing compliance is achieved by managing tax processes with the implementation of appropriate policies, procedures, and controls. Our Local MDs are skilled and educated in order to meet the CellMark Group’s tax responsibilities. In particular, we strive to meet our obligations of paying the relevant cash taxes due and ensuring accurate and timely reporting and submissions of our tax returns. Every day, our customers, employees, and stakeholders expect us to keep our promises and meet their expectations.
Ensuring reporting compliance
The CellMark Group is a large multinational group in terms of sales, number of legal entities, and countries where legal entities are located or registered. The CellMark Group strives to comply with the OECD´s Actions within the Base Erosion and Profit Shifting (“BEPS”).
Our commercial decisions are not based solely on tax considerations
A key to our success is the determination and desire to contribute to the expansion and well-being of the CellMark Group. Group Accounting is consulted and involved in advance of changes in the CellMark Group’s legal structure, and any significant business transactions. Our regular internal dialogue with the rest of the business aims to identify and mitigate any potential tax risks and ensures compliance with laws and regulations. Tax does not influence our commercial decision-making, instead commercial opportunities and rationales are the driving force behind every business decision. In this context, we do not use legal entities solely for purposes of tax avoidance.
Transparent dialogue with tax authorities
The CellMark Group seek to build trust with our wider stakeholders, including tax authorities, by acting in an open and transparent way and maintaining an ongoing dialogue. In particular, we strive to have an open and honest relationship with the local tax authorities in all countries where we operate. In situations where tax law is unclear, we will engage with external tax advisors to ensure compliance and that we meet our statutory and legislative tax obligations. Where any disputes arise with tax authorities, we will resolve these in a timely manner by being co-operative and seeking relevant approval from tax authorities prior to entering into any transactions, where appropriate. Group Accounting pro-actively manages CellMark’s relationship with tax authorities with the aim of minimising the risk of challenge, dispute, or damage to the Group’s credibility.
The CellMark Group seeks to provide any other relevant information requested by a tax authority without delay in order to accurately establish the relevant CellMark entity’s tax liabilities.
Thus, Group Accounting and the local accounting department in each CellMark entity are required to foster good professional and transparent relationships with their respective tax authority.
3. Retention of tax-related documentation
The CellMark Group adheres to local rules and regulations on documentation retention requirements. As a minimum, each tax-paying entity within the CellMark Group should document and retain all information required to determine the taxable amount and related taxation, such as accounting workbooks and sheets, files, and other documentation.
4. Governance, Structure & Organisation
The CellMark Group is committed to meeting high standards of Corporate Governance and the CellMark Group has therefore created a structure for responsibility and governance. CellMark’s governance ensures value creation for the CellMark Group and serves to protect stakeholder’s interests.
4.2 Structure & Organisation
The responsibilities and roles within the CellMark Group in relation to the Tax Strategy are as follows:
- Group Accounting is responsible for the execution of this Strategy and reports to the CFO.
- The VP Accounting, CEO and CFO are responsible for reviewing and approving this Strategy.
- CMAB’s Board of Directors is ultimately responsible for the CellMark Group’s tax position and strategies and should also approve this Strategy, after review and approval from the VP Accounting, CFO and CEO.
- The VP ESG & Compliance and the Divisional Presidents support and reinforce this Strategy.
- Local MDs of the CellMark Group’s companies are fully involved in and responsible for preparing and providing part of the necessary tax information, as well as being responsible for the compliance with local rules. Local MDs liaise with and continuously seek support from Group Accounting.
- The Group Accounting reviews tax matters on a regular basis. The Audit committee also reviews tax matters as part of their rolling yearly calendar or quarterly in case of relevant developments.
- The Group Accounting is responsible for ensuring that:
- Transfer Pricing Master File for the Group and Local Files, for entities in countries that require such, is produced and regularly reviewed;
- Country-by-Country (“CbC”) Report is submitted for the Ultimate Parent Entity (“UPE”).
- When local tax authorities require CbC notifications, Local MDs of the CellMark Group’s companies are responsible for submitting this. Local MDs liaise with and continuously seek support from Local Finance and Group Accounting.
- The local HR functions as well as the local accounting departments within the CellMark Group are responsible for compliance in respect of employee taxes.
- Group Accounting and Local MDs engage external advisors when it is deemed prudent to obtain a third party’s expert view on a specific issue.
The governance model is illustrated in the figure below:’
- Local accounting is normally the primary contact with stakeholders in local matters (supported if necessary, by Group Accounting)
- Group Accounting is normally the primary contact with stakeholders in regard to Swedish tax matters and strategical tax matters for the CellMark Group
Appendix 1 – List of entities
- CellMark Chemicals Ltd