KONGSBERG is transparent in our approach to taxation and our tax positions
Responsible Tax – our Tax Policy
KONGSBERG’s international presence means that we must comply with a wide variety of tax systems in many countries. In our opinion, a responsible approach to taxation is essential for our long-term activities in the countries in which we operate. This includes identifying and complying with current tax legislation, disclosing all the necessary information to the relevant authorities and taking prudent tax positions where tax legislation allows different interpretations or choices.
Tax governance
Our objective is to comply with tax laws in a responsible manner and to have open and constructive relationships with tax authorities in the countries in which we operate.
KONGSBERG has a central tax department that reports to corporate management, and whose primary purpose is to ensure compliance with our Tax Policy throughout the Group. The tax department and local management within the Group companies ensure compliance with local tax reporting requirements in the countries in which KONGSBERG operates, in cooperation with internationally recognised tax advisers. The tax department regularly monitors the external advisers.
Our approach to tax planning
- We engage in efficient tax planning that supports our business and reflects commercial and economic activity.
- We do not engage in artificial tax arrangements.
- We comply with relevant tax regulations and their intentions.
- We seek to minimise the risk of uncertainty or disputes.
- We carry out transactions and profit allocation between the KONGSBERG business areas in accordance with current OECD principles.
We establish entities in countries suitable for the Group’s investments, taking into consideration our business activities and requirements and the regulatory environment available to us.
Tax incentives and tax exemptions are sometimes offered by authorities to support investment, employment and economic development. Where they exist, and are offered to us, we seek to apply them in the manner intended.
Risk management
KONGSBERG operates in industries and countries that can involve different types of risk. We conduct risk analyses and prioritise and manage risk to prevent and mitigate to the greatest possible extent.
We carry out this work through appropriate risk management processes, controls and guidelines. We monitor the management of tax risk primarily through regular tax reporting, which provides us with an effective opportunity to track tax risk.
The tax department works to deliver clear, timely and relevant business advice on tax matters. We consult external tax advisers where there is doubt about the interpretation of tax rules, after first establishing our own understanding of the position. The tax department will also, where appropriate, attempt to resolve any uncertainty through direct dialogue with the tax authorities.
Our approach to tax risks follows the same principles that apply to all other business risks. We consider reputation and corporate social responsibility as well as purely financial impacts. When making decisions on tax we take into account the materiality of any item, as well as the costs of associated tax risk mitigation actions.
We seek to minimise tax risk by complying with local tax regulations and by actively monitoring changes to such regulations.
Relationships with authorities and transparency
KONGSBERG is transparent in our approach to paying tax and our tax positions. We aim to build and sustain relationships with fiscal authorities that are constructive and based on mutual respect. We seek to work in collaboration with fiscal authorities wherever possible to achieve agreement and certainty, and to prevent and resolve disputes.
We strive to ensure that our tax reporting is consistent with local tax legislation, as well as with international reporting requirements and relevant accounting standards, such as IFRS. The KONGSBERG tax department submits a country-by-country report (CbCR) to the Norwegian authorities every year, the aim of which is to form the basis for overall risk analyses and statistics for the tax authorities. The report is automatically shared with the tax authorities in other countries where KONGSBERG operates, and contains information on income and tax broken down by country, as well as a description of the activities in each country and companies in each country. Data collection is performed as part of the Group’s annual reporting. See the key sustainability figures section for tax cost per region.
KONGSBERG supports international efforts to increase public confidence in tax legislation and the tax management of multinational enterprises, including the development of Global Reporting Initiatives standards.