Shionogi BV - Our UK Tax Strategy
1. Introduction
Shionogi B.V. is the European Headquarters of Shionogi & Co., Ltd., which is a global pharmaceutical company domiciled in Osaka, Japan. We are dedicated to discovering, developing and manufacturing innovative medicines that address unmet medical needs in the core areas of infectious disease, haematology, pain, oncology and women’s health.
Shionogi B.V. has its registered office in the Netherlands and a UK branch office[1] from which the commercial and R&D operations for the UK and Europe are run, with board and operational oversight run out of the Dutch office.
Shionogi’s global mission is to supply the best possible medicines to protect the health and wellbeing of the patients we serve. Shionogi B.V. is committed to delivering this mission, while conducting business responsibly in accordance with applicable laws and regulations, industry codes, our global values, and the Shionogi Europe Code of Business and Ethical Conduct. We strive to be a trusted pharmaceutical company, a good employer, a responsible corporate citizen, and fulfil our social responsibility by helping address major global public health concerns.
Our business activities in Europe are still in a growth phase and in time will generate a substantial amount and variety of business taxes. We pay, or will pay, applicable corporate income taxes, customs duties, excise taxes, stamp duties, value added taxes (VAT), employment and other business taxes at the appropriate levels as required by the laws and regulations in force in the UK and in all countries where we do business.
We support the efforts being made to ensure that companies are more transparent about how their tax affairs are managed in the UK.
In accordance with the requirements of paragraph 19(2) of Schedule 19 of the UK Finance Act 2016, this tax statement outlines Shionogi B.V.’s approach to taxation in the UK with respect to:
- Governance and risk management arrangements
- Level of acceptable UK tax risk
- Attitude towards tax planning
- Approach towards dealings with HMRC
[1] The UK branch office of Shionogi B.V. is registered in England and Wales under No. BR020960 and its registered address is 33 Kingsway, London, WC2B 6UF, United Kingdom.
2. Governance and risk management arrangements
As part of a multinational group with a branch office in the UK, Shionogi B.V.’s UK tax strategy is aligned with the Shionogi group’s global approach to tax. Shionogi’s global tax function, based in the parent company in Japan, is managed by the group Head of Tax who reports to the group Chief Financial Officer, and is responsible for setting, implementing and monitoring Shionogi’s global approach to tax.
The global tax team manages strategic decisions affecting Shionogi B.V. and its UK branch in consultation with specialist external tax advisors. The team also works closely with the Shionogi B.V. management and Board of directors to provide ongoing guidance and to ensure the operations of the UK branch remain tax efficient and compliant. In this way, Shionogi B.V.’s Board exercises governance and oversight of tax risks.
In respect of UK taxation, the UK based CFO is responsible for establishing and monitoring internal policies and controls governing our key tax processes, including tax accounting, reporting and transfer pricing. We have established compliance processes to ensure the integrity and timely filing of our tax returns, and that the appropriate amount of tax is paid in compliance with the laws and regulations in force in the UK and in all countries in which Shionogi B.V. operates.
Our local finance team of experienced professionals manage the reporting of our UK taxes and seek professional advice when appropriate to ensure the correct application of the law to transactions.
3. Level of acceptable UK tax risk
Tax risks can arise for a number of reasons, including ambiguities in tax laws; uncertainties regarding the application of those laws to a specific transaction; or disagreements among tax authorities as to their respective rights to tax the profits associated with a particular transaction.
We have a low tax risk tolerance in the UK and seek to mitigate tax risks by (i) identifying, assessing and managing tax risks and accounting for them properly; (ii) having internal policies, controls and governance arrangements in place to ensure compliance with tax laws and regulations and processes to monitor their effectiveness; (iii) seeking specialist external advice before taking a tax position if there is uncertainty regarding the correct application of a tax law; and (iv) engaging with HMRC and other relevant tax authorities to ensure that they have access to any information needed to evaluate our tax positions and rationales.
The global tax team ensures that significant decisions and material tax planning proposals relating to Shionogi BV and its UK branch office are discussed with and approved by Shionogi B.V.’s CFO and the SBV Management and Supervisory Boards.
4. Attitude towards tax planning
We engage in efficient tax planning that supports our business and reflects our commercial and economic activity. We do not engage in artificial tax arrangements and we do not seek to avoid tax using ‘tax havens’ or transactions we would not fully disclose to a tax authority. We have a zero-tolerance approach to tax evasion and the facilitation of tax evasion.
We monitor proposals and changes to tax incentives, exemptions and regulations and assess their impact on our business. We access government-sponsored tax reliefs and incentives where appropriate and in the manner intended.
Where required, we seek specialist external advice on the interpretation of tax rules, laws and regulations and the implications for our business. We adhere to relevant tax law and seek to minimise the risk of uncertainty or disputes.
We conduct intercompany transactions on an arm’s length basis and in accordance with current OECD guidelines, supported by suitable transfer pricing analysis and documentation.
5. Approach towards dealings with HMRC
We are committed to building and maintaining open and positive relationships with governments and tax authorities, including with Her Majesty’s Revenue and Customs (“HMRC”) in the UK. We cooperate with HMRC and other tax authorities and ensure there is access to relevant information demonstrating the accuracy and transparency of our tax processes, returns and payments.
We seek to promptly identify and resolve any matters of technical or legal uncertainty in a collaborative and proactive manner.
Where appropriate, we engage with governments on proposed changes to tax laws, either directly or through representative bodies.
6. Shionogi group tax policy statement
The Shionogi group tax policy statement can be found here.