There are several levels of control to limit tax risk and provide governance:
- The Nissan Global Code of Conduct sets out the integrity expected from employees.
- The Senior Accounting Officer (SAO) regime and structure applies to the UK companies and controls are in place to ensure correct tax accounting. These are consistent with and enhanced by Japanese Sarbanes Oxley (JSOX) reviews and strengthened through external review.
- Within the Global framework the UK companies report key compliance tasks due and completed in a structured way through a tax compliance administration tool. Any unresolved discussion issues with HMRC are also reported through this administration tool to Nissan Global HQ in Japan.
- Similarly, the structured Delegation of Authority controls mean decisions on tax agreements (together with decisions on many areas) are subject to review and authorisation by local / regional / global senior management depending on the underlying value of the decision. This ensures both local and regional oversight of decision making.
- The UK Boards of Directors are briefed on material tax issues and support this tax strategy.
- Tax risk is also managed through a conservative attitude to tax planning and open communication with tax authorities and maximising certainty through Advanced Pricing Agreements. To this end the pricing and attribution of profits have been discussed in detail with both UK and Swiss Tax Authorities to ensure that such attribution is in accordance with OECD guidelines.
The inherent risk due to size, complexity and change is mitigated by:
- Tax Function involvement in key business decisions and general business awareness through the structured debrief cascade within Nissan. This is enhanced through local Finance Director overview of tax function.
- Tax function validation of intercompany invoicing and intra company contracts.
- Tax staff training to maintain and enhance tax proficiencies.
- Analytical review of tax returns prior to submission to ensure they are supported by movements in the underlying business data.
- Taking external advice in complex specialist areas.
- Engaging with professional trade bodies to identify future risks and changes.