The NEC Corporation is the ultimate parent company of the global NEC group, established in Tokyo, Japan. The principal activity of the NEC group and its subsidiaries is the purchase and supply of systems, components, services and integrated solutions for computing and communications applications, as well as high performance computing solutions.
GROUP TAX STRATEGY
This strategy applies to the group of companies in the UK ultimately headed by the NEC Corporation in accordance with paragraph 19 of Schedule 19 to the Finance Act 2016. A list of the entities to which it applies is set out below. In this strategy, references to ‘NEC Corporation’, or ‘the group’ are to all these entities. The strategy has been published in accordance with paragraph 16(4) of the Schedule.
The NEC Corporation Tax Strategy determines its approach to tax compliance, risk management and its relationship with tax authorities.
The group will ensure its Tax Strategy is fully aligned with the Global NEC Vision, in which the aim is “to be a leading global company leveraging the power of innovation to realize an information society friendly to humans and the earth”. Within this vision the group Tax Strategy sets out to govern, manage and disclose tax risks and report tax positions, submit tax returns and pay the correct tax due in a timely and accurate fashion. Furthermore, the group will adhere to the at arms’ length principal regarding intragroup transactions between NEC companies, as set out in current OECD principles and in accordance with current and future Base Erosion & Profit Sharing (BEPS) related developments and implementations.
This strategy applies from the date of publication until it is superseded.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 of which the Group has legal responsibilities.
The group tax strategy focusses on 3 aspects:
Tax governance and tax risk management;
Attitude towards tax planning and level of risk the group is prepared to accept
Policy engaging tax authorities
1. Tax governance and tax risk management
Tax governance and tax risk management are part of the global NEC group risk and compliance processes. Tax governance and control processes are set up in such a way that any tax filing required by law will be submitted timely and accurately and payments of taxes due will be paid in accordance with the submitted tax filings. The group tax team will work closely with the NEC compliance division to identify, monitor and avoid any risk for timely and correct submission of tax declarations and payment of the taxes due within the framework of the tax governance and control processes. The group collectively agree the Tax Strategy and each group member takes responsibility for applying the principles through the below governance structure:
- Ultimate responsibility for the implementation of the Tax Strategy rests with the Board of each group member;
- The executive management of the each group member’s tax compliance is delegated by the Board to the Chief Financial Officer where the role exists; otherwise it is delegated to the senior member of the finance team.
- Day-to-day management of each group member’s tax affairs is delegated to the senior member of the finance team.
- The teams managing tax affairs are staffed with appropriately trained individuals, drawing on support from the Japanese tax team when required;
- The Board of each group member ensures that the Tax Strategy is one of the factors considered in all investments and significant business decisions taken.
The group tax team will ensure that any material risk will be reported to senior management and board members to provide a general overview of the potential liabilities and to advise the senior management on how to mitigate and control these tax risks. The board ensures that risk treatment plans for material risks are put in place and ensures timely mitigation. Furthermore, as part of these overall governance and control processes, the group makes sure that the tax positions and any tax risks are correctly and appropriately accounted for in accordance to international accounting rules and standards.
In order to ensure the group operates within the tax compliance framework, periodic review of processes and documentation is being performed and updated if necessary due to change of law, deployment of new products or any other reason the business structure has changed.
Appropriate training is carried out for staff outside the tax team who manage or process matters which have tax implications.
Advice is sought from external advisers where appropriate.
2. Attitude towards tax planning and level of risk
The group manages risks to ensure compliance with legal requirements in a manner which ensures payment of the right amount of tax.
When entering into commercial transactions, the group seeks to take advantage of available tax incentives, reliefs and exemptions in line with, and in the spirit of, tax legislation. The group does not undertake tax planning unrelated to such commercial transactions.
The level of risk which the NEC Corporation accepts in relation to UK taxation is consistent with its overall objective of achieving certainty in the group’s tax affairs. At all times the NEC Corporation seeks to comply fully with its regulatory and other obligations and to act in a way which upholds its reputation as a responsible corporate citizen. In relation to any specific issue or transaction, the Board is ultimately responsible for identifying the risks, including tax risks, which need to be addressed and for determining what actions should be taken to manage those risks, having regard to the materiality of the amounts and obligations in question.
The group does not engage in any activities that are at odds with the BEPS principles outlined by the OECD.
3. Policy engaging tax authorities
The group engages tax authorities in a transparent, constructive and pro-active manner, in which it strives to establish a collaborative relationship with the relevant departments of any tax authority. If and when necessary and possible, the NEC Group will actively reach out to tax authorities to clarify both the NEC Group’s long term tax position as well as short term uncertainties by requesting upfront explanations, clarifications and agreements.
Date published: 31/03/2021
List of entities covered by this Tax Strategy
- Argon NPS (Holdings) Limited
- Argon NPS Limited
- CoralTree Systems Holdings Limited
- CoralTree Systems Limited
- Health Information Systems (UK) Limited
- JAE Europe Limited
- NEC (UK) Limited
- NEC Capital (UK) Plc
- NEC Display Solutions Limited
- NEC Europe Limited
- NEC Telecom Modus Limited
- NetCracker Technology EMEA Limited
- Northgate Public Services (UK) Limited
- Northgate Public Services Limited
- Garden Private Holdings Limited
- Rave Technologies (UK) Limited
- Spherecom Limited
- I2N Limited
- APD Communications Limited
- APD Mobile Data Limited
- NPS (UK11) Limited
- Medical Imaging UK Limited
- Digital Healthcare Limited
- We are Snook Limited
- NPS (holdings) Limited
- NEC Software Solutions (UK) Limited
- Charter Systems Limited
- Avaloq Innovation Limited
- Avaloq UK Limited