Clariant aims at full transparency towards tax authorities with the focus on constructive dialogue and mutual trust on a long term basis and complies with the good citizen principles in the country where it operates. Disclosures of relevant facts and circumstances are made in accordance with the relevant domestic regulations.
As a general principle, Clariant does not operate with affiliates located in secrecy / non-cooperative jurisdictions, unless required for operational reasons. In this case, Clariant define the appropriate substance for the entity to be located in such jurisdiction and profit allocated to this entity is defined according to its functional and risk profile based on the arm’s length principle.
The Clariant’s corporate tax/indirect tax affairs are managed by an experienced tax team operating with full integrity. Given the increasing transfer pricing requirements and regulations, any member of the tax team must have a minimum level of experience in transfer pricing acquired either in the industry or in the advisory sector.
Clariant is well aware of its duty to contribute equitable and fair tax amounts to local governments and to comply with the applicable local tax laws and rules. On the other hand, it also recognizes its responsibility towards its shareholders for maintaining tax costs at a reasonable level. Therefore, tax planning projects including restructuring projects are still considered. However, any restructuring project must be carried out in compliance with local tax regulations and transfer pricing requirements including the calculation of arm’s length transfer price for any intragroup transaction identified in relation to such project. The transfer price must take into account the functional and risk profiles of affiliates involved in the transaction.
Transfer pricing documentation are prepared in due time with support of external advisors. Transfer pricing policy for any new intragroup transactions is discussed and approved by Tax team in Switzerland with support of external advisors for material transactions or wherever deemed appropriate / legally required. Existing transfer pricing policies are monitored and amended if required to consider change in tax environment (e.g., court decision, change in tax law) and in economic environment. .
Due to constant development of tax law, Clariant strives for certainty on the material tax positions it takes and hence closely cooperates with trusted tax advisors for compliance with local tax law. Clariant aims to always comply with both the spirit and the letter of the tax law.
The tax risk management process is an integral part of the enterprise risk management. The tax risk assessment is made every year with quarterly updates, with the aim of assessing threats and opportunities that will impact the objectives set for Clariant overall, in particular with respect to financial / reputational / operational risk.
The tax policy follows business strategy and corresponds to the general accepted taxation guidelines, such as the OECD Guidelines for Multinational Enterprises, and is in line with the arm’s length principle.
Clariant’s tax strategies are regularly reviewed and supervised by the Executive Committee / Audit Committee.