Essentra Tax Strategy

General Approach & Commitment to Compliance

Essentra aims to achieve high standards of transparency and responsibility in dealing with its tax affairs, and to comply with tax laws and practice in all of the territories in which we operate. Compliance for us means paying the right amount of tax in the right place at the right time, and making relevant disclosures to tax authorities to allow them to determine that the right amount of tax has been paid in the right place at the right time.

Day-to-day tax matters are delegated by the Board to the Group Head of Tax and the Group Finance Director and overseen by the Audit Committee. Essentra’s approach to tax risk is set by the Board.

Our approach to tax planning

Where commercial objectives can be achieved in a variety of ways consideration may be given to maximising long-term value for our shareholders through tax planning. Any tax planning we undertake will support our commercial objectives and have due regard to the potential impacts on our reputation and relationships with key stakeholders. We do not undertake artificial tax planning which has no commercial purpose.

We work with governments and local authorities to ensure that Essentra is best placed to benefit from any tax incentives or reliefs in the countries in which we operate.

Attitude to tax risk

We seek to enable the business to achieve its commercial objectives and accept that, given the scale of Essentra’s business, this may involve taking on a degree of tax risk. Tax risk may arise from unclear laws, guidelines or differing interpretations, and may particularly result where transactions fall into the jurisdictions of two or more tax authorities who may take different views of the same facts and circumstances. We seek to identify, evaluate, manage and monitor these risks in line with the Board’s attitude to tax risk.

Where appropriate, for example where there is significant uncertainty or complexity, we will work with specialist tax advisors to obtain independent advice and we may liaise with tax authorities to obtain greater certainty where this is possible.

In dealing with tax risks, it is expected that all people working at Essentra will adhere to the principles laid out in Essentra’s Code of Business Ethics.

Working with tax authorities

We look to develop and maintain professional working relationships with all tax authorities, in a spirit of co-operative compliance. Where tax audits are opened, we aim to engage with tax authorities in a proactive and prompt manner in order to fairly resolve the matters under review.

Where we disagree with a ruling or decision of a tax authority or court, we will first seek to resolve any disputed matters through proactive and transparent discussion and negotiation. As a UK headquartered group we seek a particularly co-operative and transparent relationship with the UK tax authority (HMRC), with regular dialogue carried out through the proper channels. This allows us to provide business updates, seek clarification on UK tax laws, offer input into UK law consultations and address any open enquiries or general questions.

Governance and monitoring

The tax landscape, general business environment and business operations continuously evolve and so our approach to tax risk management and the tax strategy will be reviewed at regular intervals and amended if necessary. Any amendments to this tax strategy may be suggested by the Group Head of Tax or the Audit Committee but in either case will need approval by the Board.

The Essentra staff responsible for tax, which include the Tax Department as well as other staff involved with tax as part of their day-to-day duties, are subject to internal and external audit reviews. Regular tax updates are given to the Group Finance Director and Audit Committee by the Group Head of Tax.

We report our tax affairs in accordance with the requirements of International Accounting Standards through our half year financial results and full year annual report. We will also report other specific information as required by the tax authorities in the countries in which we operate.

UK tax legislation

We consider this tax policy complies with the requirements of the UK legislation at Part 2, Schedule 19, Finance Act 2016.

Approval

This tax strategy has been approved by the Board of Essentra plc on 15 December 2017.