Terex UK Group Tax Strategy
In accordance with Paragraph 16(2), Schedule 19, Finance Act 2016, Terex sets out below its tax strategy for all UK companies (“Terex UK”) within the Terex worldwide group (“Terex Group”) for the financial year ending 31 December 2020. The Terex UK Tax Strategy (“Tax Strategy”) applies to all UK taxes applicable to Terex UK and is reviewed annually and updated where required.
Terex Corporation and subsidiaries (“Terex”) is a US multinational corporation that is publicly traded on the New York Stock Exchange and subject to its full regulatory framework. As of 2019 Q3, Terex is comprised of around 85 legal entities incorporated across 31 different countries. Terex generates approximately USD 4 billion in annual sales for continuing operations and currently operates in two segments, Aerial Work Platforms (“AWP”) and Materials Processing (“MP”).
As part of Terex Corporation, Terex entities within the UK are aligned with, and follow, the wider Terex guiding principles, codes of conduct and tax policy. First and foremost, the Terex Way Values demand and support a culture of tax compliance and the Terex UK tax strategy is grounded in the Terex value of integrity and our commitment to comply with all laws and regulations. Terex tax strategy is focused on ensuring that taxes and tax risk are managed to provide outcomes consistent with commercial reality and applicable law and are within the parameters of the strategic objectives of Terex. Terex Tax Strategy requires that all tax regulations are complied with in the UK and other relevant jurisdictions. The Vice President, Chief Tax Officer (“CTO”) is responsible for management of the tax affairs and global tax risks of the Terex Group. The CTO reports to the Senior Vice President, Chief Financial Officer of Terex.
Risk Management and Governance Arrangements
Responsibility for Terex policy, including tax policy, ultimately resides with the Board of Directors of Terex Corporation. The role of the Board is to focus on strategic direction and oversight of critical business risks, not to direct regular operating activities. Managing tax compliance is an increasingly complex area and the Terex Group including, Terex UK, consistently monitors local and global markets, industry trends and current and developing tax legislation in order to appropriately apply tax governance with strong internal controls in order to reduce tax risk to acceptable levels. As part of governance of tax matters, several arrangements exist, including, but not limited to:
- Quarterly formal certification procedures including the identification, evaluation, monitoring and reporting of tax issues and risks;
- Complying with internal control procedures and processes, which are subject to regular reviews, internal audits and self-assessment;
- Regular communication with UK tax authorities to ensure business risk is managed and provision of mutual assurance around the UK tax activities of Terex; and
- Various extensive auditing of UK tax activities and compliance undertaken by a third-party auditor.
Terex UK Approach to Tax Planning
Terex believes it has an obligation to its stakeholders to timely and accurately pay its taxes. It seeks to pay no less and no more than required by the application of laws to its facts and operations. Terex UK does not engage in artificial transactions for which the purpose is to reduce UK tax. The tax planning objectives of Terex UK are to support the commercial needs of the business by ensuring that its operating activities are carried out in the most financially efficient manner whilst remaining compliant with all relevant laws. Terex carefully evaluates the impact of tax arrangements on the reputation, corporate, and social responsibilities of Terex UK and the Terex Corporation as a whole.
Occasionally, Terex UK will seek further advice from competent external third-party tax advisors to provide assurance around technically complex areas of UK tax in order to adequately assess tax consequences. Consultation ensures appropriate and technically sound tax decisions are made.
Terex UK and its Tax Risks
Terex UK seeks to be compliant with tax regulations. Terex UK will not knowingly take tax positions contrary to compliance requirements and thus seeks to minimize the level of risk in relation to UK taxation. Terex UK seeks to reduce the level of tax risk arising from its operations as far as is commercially reasonable by implementing various internal tools for its business units to follow. The UK Group maintains tax accounting arrangements which are robust and enable the business to fulfill its responsibilities under the Senior Accounting Officer provisions in the UK.
Relationship with HMRC
Terex UK is committed to complying with its UK tax obligations and seeks to build and sustain an open and transparent relationship with HMRC that is constructive and based on the principles of cooperation, compliance and integrity. Terex UK complies with its tax responsibilities through:
- Submission of accurate tax returns and disclosures;
- Informing HMRC of significant changes in the business conducted by the UK group;
- Disclosing and discussing uncertainties as and when they arise;
- Focusing on, and seeking to resolve, significant issues; and
- Working collaboratively, cooperatively and in a timely and professional manner with HMRC and the designated Customer Relationship Manager (“CRM”).
Positive Approach to Tax Compliance
Terex Corporation does not encourage, promote, or enable any form of tax evasion for itself, its customers, suppliers and associated representatives. It has policies and procedures that aim to ensure that none of its employees or associates facilitate the evasion of tax in the UK or any other jurisdiction.
Date published: 15 December 2020