Policy provisions

Approach to tax: tax strategy & tax policy provisions

We see tax not as a cost factor alone, but as a means for socio-economic cohesion, sustainable growth and long-term prosperity.

• Our approach to tax is based on a tax strategy and a set of policy provisions approved by our Board of Management

• Group Tax reports at least semi-annually to the Board of Management and at least annually to the Audit Committee on tax risks, adherence to the tax strategy and its underlying policy provisions

• Our tax strategy and its underlying policy provisions apply to all PostNL group entities

• Our tax policy provisions apply to how we operate in our relationships with employees, customers, contractors and suppliers.

Accountability & tax governance

Tax is a core part of corporate social responsibility and governance and is overseen by our Board of Management.

• Our Board of Management is accountable for the tax strategy, the underlying policy provisions and tax risk management

• We have a tax control framework that sets out our tax controls and risk management

• Internal and external auditors regularly review tax controls as part of the audit of our financial results.

Tax compliance

We are committed to comply with the letter, the intent and the spirit of tax legislation in the countries in which we operate and to pay the right amount of tax at the right time.

• We prepare and file all tax returns required, providing complete, accurate and timely disclosures to all relevant tax authorities

• Our responsible tax planning is based on reasonable interpretations of applicable law and is aligned with the substance of the economic and commercial activity of our business

• We will not undertake transactions or engage in arrangements of which the sole purpose is to create a tax benefit that is in excess of a reasonable interpretation of relevant tax rules

• We will only claim tax incentives in line with the policy intent of such tax incentives and provided such incentives are generally available

• If we seek certainty in advance from tax authorities to confirm an applicable tax treatment, we do so based on full disclosure of all relevant facts and circumstances.

Business structure

We will only use business structures that are driven by commercial considerations, are aligned with business activities, and have genuine substance.

• We do not use so-called tax havens for tax avoidance. All entities in tax havens exist for substantive and commercial reasons

• We pay tax on profits according to where value is created within the normal course of commercial activity

• We use the arm’s length principle, in line with guidelines issued by the OECD, and apply this consistently across our businesses, contingent on local laws.

Relationships with tax authorities and other external stakeholders

Mutual respect, transparency and trust drive our relationships with tax authorities and other relevant external stakeholders.

• We seek to develop cooperative relationships with tax authorities, and relevant other authorities, based on mutual respect, transparency and trust

• We seek to engage constructively in national and international dialogue with governments, business groups and civil society to support the development of effective tax systems, legislation and administration

• We will work collaboratively with tax authorities to achieve early agreement on disputed issues and certainty on a real-time basis, wherever possible. Where there is controversy, we will strive to resolve the controversy by applying these principles.

Tax transparency & reporting

We regularly provide information to our stakeholders, including investors, policy makers, employees, civil society and the general public, about our approach to tax and taxes paid. We therefore publish the following information:

• A tax strategy or policy and our approach to tax risk management

• A list of group entities, with ownership information and a brief explanation of the type and geographic scope of activities

• Annual information on the corporate income tax we accrue and pay on a cash basis at a country level

• The total tax borne and collected by us, globally or per country, including corporate income taxes, property taxes, (non-creditable) VAT and other sales taxes, employer/employee- related taxes, and other taxes that constitute costs to us or are remitted by us on behalf of customers or employees, by category of taxes

• Information on financially material tax incentives (e.g. tax holidays), including an outline of the incentive requirements and when it expires

• An outline of the advocacy approach we take on tax issues, the channels through which we engage in regard to policy development, and the overall purpose of its engagement.