Kuehne+Nagel’s business activities generate a substantial amount and variety of taxes such as corporate income tax, stamp duties or withholding taxes. Kuehne+Nagel collects and pays value-added and other indirect taxes as well as employee taxes. These taxes paid form a significant part of the economic contribution to the countries in which Kuehne+Nagel operates. The taxes Kuehne+Nagel pays are an important part of our contribution to economies and help the development of many countries. Kuehne+Nagel believes that responsible tax behaviour is an essential element of its sustainability strategy.
Kuehne+Nagel commits to be a responsible corporate citizen. The Group tax mandate includes the obligations to:
- Responsibly manage the Group’s tax affairs and protect shareholder value in line with the Group’s Code of Conduct,
- Provide adequate tax advice service and business-critical communication to the Group’s Audit Committee, Group Management Board, Business Units, and other important stakeholders
- Maintain a robust tax control environment and tax risk framework that considers current tax law regulations and practice.
Kuehne+Nagel’s Code of Conduct includes our approach to tax and sets the expectation for everyone in the organisation.
To adhere to tax principles:
Compliance: Kuehne+Nagel acts in strict accordance with the applicable tax laws and complies with international standards, namely OECD standards. In case the letter of the law is not clear or does not provide an answer, the organisation complies with the spirit of the law. Kuehne+Nagel fully respects each government's right to determine its tax rate and tax collection mechanism.
Substance, transparency and arm’s length principle: Kuehne+Nagel may engage in efficiently structuring tax, which is to be understood as following the commercial reality from operating its business models. For purposes of taxation of profits, Kuehne+Nagel attributes taxable results only where substance and value are commercially created through its business activity. Kuehne+Nagel understands substance as economically owning an asset and actively executing decisions of taking on and management of risks associated to this taxable result.
Kuehne+Nagel is transparent in its approach to tax. All transactions must have a commercial and business reason and Kuehne+Nagel adheres to the OECD’s arm’s length principle.
Relationship with tax authorities:
Kuehne+Nagel constantly aims to develop and sustain a mutually respectful relationship with national tax authorities based on trust and transparency.
Tax risk management:
As a large multi-national operating in more than 100 countries, Kuehne+Nagel is exposed to a variety of tax risks, grouped as follows: tax reporting and compliance risk, transactional risks, reputational risk.
Progress/continued in 2020
Kuehne+Nagel manages tax risks in accordance with its Internal Control System similar to operational risks across the Group.
In addition to its Group’s tax oversight role, Corporate Tax provides advice to the Group and its business activities on tax-related issues, undertakes or assists with tax filings, manages relationships with tax authorities and assists in various forms of tax reporting. Internal controls and escalation procedures are put in place to identify, quantify and manage key tax risks.
Where appropriate, Kuehne+Nagel engages proactively with tax authorities to disclose and resolve issues, risks and potentially uncertain tax positions. The subjective nature of many tax rules however means that it may be difficult to mitigate known tax risks. Whenever Kuehne+Nagel’s approach is consistent with the principles set out in the tax strategy and where the range of possible outcomes is in accordance with the Group's risk appetite, an element of tax risk may arise. As a result, at any given time, the Group may be exposed to financial and reputational risks arising from its tax affairs.