Contributing to society through a responsible approach to tax
The publication of the Group's tax policy underlines our commitment to take a responsible approach to tax issues.
Context and challenges
Since the 2008 financial crisis, the fight against tax avoidance and tax evasion has become a key concern for any citizen. People got interested in the tax policy of large multinational corporations they suspected to fraud.
In this context, the G20 member countries requested the Organisation for Economic Cooperation and Development (“OECD”) to review international tax rules and create new ones so as to address weaknesses in the current tax system. The OECD launched the "BEPS" project (*) consisting of 15 Action Plans to address the problem of base erosion and profit shifting. This project resulted in a package of recommendations leading to improved coherence of international tax rules and transparency of the tax environment.
Following BEPS, several transparency obligations on companies have been adopted. In the United Kingdom, certain groups have to publish their tax strategy since 2016. The required information must be published on their website.
As an international group, Le Groupe La Poste is aware of its responsibility and is committed to paying its fair share of income tax in the countries where it operates, in accordance with the applicable laws. As a good corporate citizen, the Group considers taxation as a part of its commitment to sustainable and responsible growth.
Considering tax transparency as a key element of its ethical commitment, Le Groupe La Poste already publishes information on the risks and policies implemented to combat tax evasion (**). In this context, Le Groupe La Poste decided to further increase its tax transparency by describing its tax policy.
This publication of our Tax Policy is a token of our commitment to explain our guiding principles in relation to taxes.
* "Base Erosion Profit Shifting"
** Registration Document 2018, La Poste Group's extra-financial performance statement (p.495)
In 2018, the consolidated amount of corporate taxes paid by Le Groupe La Poste amounted to €161 million. This represents an Effective Tax Rate of 34.43%.
In addition to corporate taxes, Le Groupe La Poste pays and collects numerous others taxes and contributions, including payroll taxes and social contributions, sales taxes and local taxes specific to each country.
For example, Le Groupe La Poste paid more than €130 million in local taxes (property tax and other specific French taxes such as “CET”).
La Poste SA benefits from favourable local tax treatment in consideration for La Poste’s obligation to serve the entire French territory, and its contribution to regional development
Every year, Le Groupe La Poste publishes a note on its taxes and contributions in its registration document. Therefore, the Group already publishes information on taxes paid. (Registration Document 2018, Chapter 20)
Tax policy execution
Le Groupe La Poste has a team of qualified and well-trained tax specialists working under the supervision of the Group Tax Director. This Group Tax Department is responsible for the Group's tax policy.
The Group Tax Department is in charge of protecting the reputation of Le Groupe La Poste on all issues related to taxation. All tax risks are managed by the Group Tax Department with the support of external consultants ‘opinions when tax law is subject to interpretation, if necessary.
The risk management and internal control system put in place by Le Groupe La Poste and described in its Registration Document (chapter 9) also applies to its tax management. These help to prevent, identify and control the main tax risk factors that might threaten the realization of the Group's objectives.
Le Groupe La Poste uses the same tax reporting tools as those used by the largest French groups.
Tax management is structured so as to achieve perfect compliance with evolving regulations in countries where the Group operates.
Thus, in addition to the Group Tax Department, subsidiaries located in France and abroad may have their own tax team responsible for ensuring tax compliance.
The main tax principles of the Group are as follows:
Respect for OECD principles
In relation to intragroup transactions, Le Groupe La Poste applies the OECD standard and ensures that the transfer pricing policies implemented comply with the arm’s length principle.
Given the nature of the Group’s activities, intragroup transactions between companies resident in different countries are relatively limited.
Intragroup transactions are detailed in the transfer pricing documentation prepared by the Group Tax Department.
Such transactions are communicated to the tax authorities in its simplified declarations on transfer pricing. Le Groupe La Poste also files an annual declaration including the country-by-country breakdown of its profits ("Country by Country Reporting" or "CbCR").
Le Groupe La Poste may benefit from available taxes incentives, reliefs and exemptions in accordance with tax legislation and the business of the Group.
However, the Group Tax Department is committed not to take an aggressive stance in the interpretation of tax legislation or to enter into artificial tax arrangements.
The Group will only use tax incentives after taking into account their impact on its reputation and its corporate social responsibility.
Operations essentially tax motivated are prohibited: the objective of each transaction must be non-artificial, coherent, credible and consistent with the intentions of the legislator.
Strict policy with regard to tax havens
Le Groupe La Poste does not encourage or promote tax evasion.
Le Groupe la Poste is committed to a strict policy with regards to tax havens. No establishment of the Group is authorized in a state or territory on the official French or European Union lists of non-cooperative jurisdictions for tax purposes (e.g., the EU “blacklist” published by the Council of the European Union).
All proposed relationships with partners, distributors and customers resident or established in a country appearing on these lists must be submitted to the Group Tax Department or the relevant subsidiary before any signature or commitment.
Relations with public authorities
Relations with tax authorities
To build and maintain a constructive relationship with tax authorities based on mutual respect highlights a responsible tax policy.
In its relations with the tax authorities, Le Groupe La Poste ensures that :
Transactions comply with tax law as well as local regulations and tax obligations.
Tax returns and tax payments are made in compliance with tax laws.
It will work collaboratively with tax authorities to achieve efficient dialogue and resolve potential disputes.
In case of litigation all necessary information is transmitted transparently and in a timely manner to the competent tax authorities.
It will keep all tax records and establish tax reporting.
All decisions are taken at the right hierarchical level and are properly documented to highlight the facts, conclusions and potential tax risks.
Contribution to the public debate
In accordance with its social responsibility, Le Groupe La Poste:
Participates in consultations initiated by the Government, tax authorities or professional and international organizations to support the development of more effective tax policies.
Provides feedback to the Government about potential impacts of tax changes to the economic environment.
Tax risk management
Ensure predictability for the Group
Fiscal risk management is an integral part of the Group's overall risk management process.
The features of the Group’s risk management systems apply to tax risk management (Registration Document 2018, chapter 9).
Le Groupe La Posteaims at providing financial and tax visibility and projections for the Group. In this sense, the Group Tax Department is constantly monitoring the proposed drafts legislation of the countries in which the Group operates.
Strong financial reporting systems and processes are adopted and allow the tax returns to be timely filed. Those tax returns are prepared and reviewed internally and, in some cases, reviewed by external advisors before their filing.
The Group Tax Department works with the tax authorities whenever possible to avoid the risk of tax disputes. In addition, the Group Tax Department, assisted where necessary by external advisors, tries to eliminate any tax risk arising from uncertainty in the interpretation of tax law.
Le Groupe La Poste is regularly subject to tax audits. The Group Tax Department works to defend the Group interest while respecting tax law, and ensures that any request from tax authorities are timely and correctly addressed.
However, the Group's tax positions may sometimes be challenged by the tax authorities due to differences in the interpretation of law.
The Group Tax Department is also in charge of following up on litigation processes if needed.
"The Group recognises that fiscal risk management is an integral part of good governance"