Tax Strategy & Policy
Tax strategyKPN’s Board of Management considers its Corporate Tax Department as a crucial partner within the business and expects the Corporate Tax Department, while adhering to the Tax Policy, to provide clear, timely, relevant and business focused advice across all aspects of tax. Where alternative routes exist to achieve the same commercial results, the Corporate Tax Department is challenged to recommend the most tax efficient and responsible approach in the interest of all stakeholders, while remaining compliant with all relevant laws, regulations and international standards.
Tax policyKPN’s Tax Policy is embedded in 5 pillars; Compliance, Transparency, Relationship with tax authorities, Accountability & Governance, Business rationale & transfer pricing.
We commit ourselves to behave responsibly at all times which is integral to ensuring the long-term sustainability of our business. We act in accordance with applicable tax laws and regulations and are guided by relevant international standards, for example OECD (Organization for Economic Cooperation and Development) Guidelines. At all times, we respect the spirit of the law. Where tax laws do not give clear guidance, prudence and transparency shall be the guiding principles.
We believe that transparency is a cornerstone of good tax governance. We regularly put forward understandable and timely communication about our approach to tax, our tax position, and total tax payments on a country-by-country basis.
We fulfil our disclosure obligations and are transparent to tax authorities. We support global initiatives of the OECD to promote tax transparency and responsible tax management.
Relationship with tax authorities and other stakeholders
We seek to maintain an open, honest and constructive dialog with tax authorities based on transparency, respect and trust. Consequently we disclose of all relevant facts and circumstances. In The Netherlands this is embedded in Enhanced Supervision (‘horizontal monitoring’) where we aim to enhance clarity and upfront certainty around tax. To this end, we engage proactively with Dutch tax authorities. We meet on a regular basis to ensure that our business dealings are better understood and to exchange views and insights on various (tax) matters. This open, two-way communication enables us to minimize uncertain tax positions.
Towards our other stakeholders like NGO’s and interest groups we furthermore note that our Corporate Tax Department is aligned with the business and is not a profit centre by itself and welcome constructive debate on taxation. We aim to show good corporate citizenship in the way we handle tax issues and communicate clearly about our strategy and policy on tax governance.
Accountability & Governance
KPN’s Corporate Tax Department is the focal point on all tax related matters and consists of well-educated and adequate staff of tax professionals who are in constant dialogue with KPN"s senior management and KPN"s business. This ensures that KPN"s (senior) management is engaged and involved in all relevant tax matters. Within KPN we adhere to our Code of Conduct ensuring our accountability and Governance. Our Tax Policy is in line with our Code of Conduct. On a quarterly basis we report to the Board of Management on adherence to our Tax Policy.
Business rationale & transfer pricing
We do not enter into aggressive and contrived tax planning structures. We therefore do not use secrecy jurisdictions or so-called ‘tax havens’ solely for tax avoidance, nor artificial tax structures that have no commercial or operational substance.
As we ensure that transfer pricing policies comply with applicable internationally agreed and recognized principles as outlined in the OECD guidelines, we report income in the countries where the value is created applying the arm’s length principle.