Clariant aims for full transparency towards tax authorities. The company focuses on constructive dialog 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 defines 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.
Clariant’s corporate tax/indirect tax affairs are managed by an experienced tax team operating with full integrity. In view of 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 applicable local tax laws and rules. On the other hand, it also recognizes its responsibility towards its shareholders to maintain tax costs at a reasonable level. For this reason, tax planning projects including restructuring projects are 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. Clariant does not engage in artificial tax arrangements and does not engage in tax structures without commercial substance.
Transfer pricing documentation is prepared in due time with support of external advisors. Transfer pricing policy for any new intragroup transactions is discussed and approved by the tax team in Switzerland with the support of external advisors for material transactions or wherever deemed appropriate or legally required. Existing transfer pricing policies are monitored and amended if required to consider changes in the tax environment (e.g., court decisions, changes in tax law) and in the economic environment.
Due to the 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 comply at all times 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 Organization for Economic Co-operation and Development (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 its Executive and Audit Committees.