What is your approach to tax affairs?

Last updated: 03/12/2018
This statement sets out the approach of the UK companies of the adidas group to their tax
affairs for the year ended 31 December 2018.
 
The companies covered are:
  • adidas (UK) Limited
  • Reebok International Limited
  • Reebok Europe Holdings
  • Reebok Pension Management Limited
  • Luta Limited
  • Trafford Park DC Limited
 
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 predominantly 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 1,363 people across the UK; offices are based in Stockport and
London along with a distribution centre in Trafford. 26 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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