Hitachi conducts business on a global scale across a broad range of business areas and utilises sophisticated and specialised technologies to carry out its operations. As a result, it is exposed to risks attributable to the economic environment, risks inherent in individual industrial sectors and business lines and risks related to our operations. This is no different in the UK.
Recent developments in the tax environment have led to tax authorities around the world introducing additional reporting, compliance and governance requirements that companies must fulfil. These include the Senior Accounting Officer (SAO) rules and Publication of Tax Strategy requirements in the UK, the latter requiring UK resident companies that meet certain requirements to publish their tax strategy in the UK and make it available for the public.
Hitachi, as a socially responsible company, keeps up to date with these requirements and ensures measures are put in place to comply with them. As part of these measures, in 2016 Hitachi introduced basic rules that Hitachi Group companies must follow when dealing with any matter related to tax (the “global tax rules”).
This Hitachi Group Strategy for UK Tax Management (the “UK Tax Strategy”) applies to all Hitachi Group UK resident entities as listed in Appendix I.
UK Tax Strategy
Introduction to the UK tax strategy
The UK Tax Strategy is focused on ensuring that the Hitachi Group UK companies’ taxes and tax risks are managed to provide a sustainable outcome within the parameters of Hitachi’s strategic and commercial objectives. The UK Tax Strategy covers the below areas:
- Approach to Risk Management and Governance
- Attitude to Tax Planning
- Level of risk the Hitachi Group UK companies are willing to accept
- Approach of the Hitachi Group UK companies towards HMRC
UK Tax Strategy Statement
1. Approach to Risk Management and Governance
Our objective is to operate effective governance by implementing an effective tax control framework with an ongoing monitoring process to ensure key tax controls operate to mitigate tax risk to acceptable levels. The global tax rules were introduced as the general rules for risk management and governance to which all Hitachi Group companies must adhere.
The global tax rules require all Hitachi Group companies to manage their tax affairs efficiently, continuously and proactively. These rules also require all Hitachi Group companies to have systems, processes and controls in place that enable them to comply with their tax obligations. In the UK, Hitachi’s Internal Audit group performs annual JSOX audits on the different group companies testing these systems, processes and controls, and providing assurance to the company’s management.
Given the diverse nature of taxation issues and enquiries from tax authorities, each Hitachi group company must evaluate the risks of taxation against the relevant rules and regulations in each country at that given time. If important issues are likely to arise, or have an impact on other group companies, then the company will report to both its parent company and the Hitachi, Ltd. Headquarter Tax Group.
2. Attitude to Tax Planning
Under the Hitachi Group Codes of Conduct (the “Codes of Conduct”), Hitachi Group companies will always observe laws and regulations and act fairly in all circumstances. In addition, the companies will thoroughly implement the Codes of Conduct to ensure that all their business activities are conducted on the basis of corporate ethics and compliance, in accordance with “basics and ethics.”
Furthermore, as a matter of principle, Hitachi Group companies aim to comply with all relevant tax rules and regulations of the countries in which they operate, as well as with international standards of tax rules.
Hitachi Group UK companies aim to follow the letter and spirit of the law on all matters related to taxation. The tax implications of all significant transactions are thoroughly analysed, with the support of external tax advisors where necessary, and potential outcomes are determined based on the rules and regulations in force at the time.
When achieving the desired commercial result, the most tax efficient outcome will be considered; however, Hitachi Group companies do not engage in any form of aggressive tax planning. As a general rule, any tax planning is aligned to the commercial business activities, and the final decision should be based on the commercial needs of the company or group.
3. Level of Risk the Hitachi Group UK companies are willing to accept
Just like other businesses, each Hitachi Group UK company has its own inherent level of tax risk that it is willing to accept. Nevertheless, as per the global tax rules, Hitachi Group companies are required to put in place measures to enhance tax risk management.
As general practice, Hitachi’s appetite for risk is low. Hence, in uncertain situations Hitachi Group companies will seek external tax advice to assess the potential risks of the relevant transaction.
4. Approach of the company towards HMRC
Hitachi Group UK companies aim to make accurate and timely disclosures in tax returns and other documents submitted to HMRC. In addition, the companies will respond in a timely manner to any enquiries raised by HMRC, and provide any necessary information as required for such enquiries.
Hitachi Group UK companies aim to act in a trustful and cooperative manner when dealing with the tax authorities as specified in the global tax rules. For these purposes, the companies will proactively manage their relationship with HMRC.
Hitachi Group UK companies keep up to date with legislation and ensure compliance with the applicable requirements. Therefore, the UK resident companies that have met the requirements to publish their tax strategy in the UK have done so in accordance with paragraph 16(2) of the UK Finance Act 2016.
Appendix 1: List of Hitachi Group UK companies included in the strategy
|Abba Lifts Ltd.||Hitachi Europe Ltd.|
|Ansaldo STS France Societe Par Actions Simplifiee - Branch||Hitachi High Technologies Analytical Science Ltd.|
|Ansaldo STS UK Ltd.||Hitachi High Technologies Europe GmbH - Branch|
Bradken UK Ltd.
|Hitachi Information Control Systems Europe Ltd.|
|Celerant Consulting Acquisitions Ltd.||Hitachi Medical Systems UK Ltd.|
|Celerant Consulting Holdings Ltd.||Hitachi Metals Europe GmbH - Branch|
|Celerant Consulting Investments Ltd.||Hitachi Nuclear Energy Europe Ltd.|
|Celerant Consulting Russia Ltd.||Hitachi Nuclear Projects Development Europe Ltd.|
|Celerant Unlimited.||Hitachi Rail Europe Ltd.|
|Celerant US Ltd.||Hitachi Solutions Europe Ltd.|
|Clarion (G.B.) Ltd.||Hitachi Vantara Ltd.|
|Fiamm UK Ltd.||Hitachi Visaginas Project Investment UK Ltd.|
|Heavy Construction Machinery Ltd.||Horizon Nuclear Power Ltd.|
|Heavy Machinery Group Holdings Ltd.||Horizon Nuclear Power Oldbury Ltd.|
|Heavy Machinery Group Ltd.||Horizon Nuclear Power Services Ltd|
|Heavy Machinery Group Subsidiary Ltd.||Horizon Nuclear Power Wylfa Holdings Ltd.|
|Hitachi Automotive Systems UK Ltd.||Horizon Nuclear Power Wylfa Ltd.|
|Hitachi Cable Europe Ltd.||Information Management Group Ltd.|
|Hitachi Construction Machinery (UK) Ltd.||Oxya UK|
|Hitachi Consulting (UAE) Ltd.||Pentaho Ltd.|
|Hitachi Consulting Europe Ltd.||Temple Lifts Group 2010 Ltd.|
|Hitachi Consulting UK Ltd.||Temple Lifts Group Ltd.|
|Hitachi Data Systems Engineering UK Ltd.||Temple Lifts Ltd.|
|Download PDF version||244.47 KB|