We are a global medical products and technologies company, with leading market positions in advanced wound care, ostomy care, continence and critical care, and infusion devices. Our products provide our customers — including doctors, nurses and patients — with a range of clinical and economic benefits, including infection prevention, protection of at-risk skin, improved patient outcomes and reduced total cost of care. Today, we have more than 9,000 employees, with 9 manufacturing sites in 7 countries, and conduct business in more than 100 countries. We market our products in more than 100 countries through direct sales and local distributors. These business activities generate a substantial amount of taxes. These include both corporate income taxes and non-income taxes such as property taxes, VAT/sales & use taxes, and other taxes.
We operate in an industry that is constantly changing and highly regulated. ConvaTec is fully committed to meeting the highest standards of compliance and ethical behavior, adhering strictly to all applicable laws, regulations and policies, and conducting ourselves with integrity and honesty – every day, in everything we do.
ConvaTec‘s Code of Ethics and Business Conduct requires that all its books and records accurately and fairly reflect its transactions, and our approach to tax aligns to that code.
Our tax approach is based on the following principles:
Our tax risk management follows ConvaTec’s Group Tax Policy, Grant of Approval and applicable internal control processes. Our Group Tax Policy covers all tax processes including tax planning, accounting and compliance. Tax risks are identified through early assessment and appraisal of changes to tax legislation, business decisions and the external environment within which we operate. We apply risk management controls over tax compliance and monitor effectiveness of tax compliance activities of all group companies. This reflects our commitment to ensuring we comply with the requirements of each of the countries in which we operate.
Our Group Tax is responsible for implementing ConvaTec’s tax approach, which has been approved by the ConvaTec Board, and ensuring global compliance with this approach by the group. Group Tax is responsible for ensuring that policies and procedures that support this approach are used consistently throughout the group, and is supported by an experienced tax team with the skills to implement this approach.
The group head of tax reports directly to the ConvaTec group Chief Financial Officer. We report on a periodic basis to the Board on how tax risks are managed, and on improvements that are being made.
Our tax arrangements are derived from the commercial needs of our business operating model, and that minimizes tax risk in respect of compliance, uncertainty, cross border transactions and disputes. ConvaTec operates through legal entities, which are established in countries where we undertake business operations or financing activities. All transactions between group companies are conducted on an arm’s length basis in accordance with OECD principles and supported by appropriate documentation and studies.
ConvaTec does seek to utilize tax incentives and exemptions where these are made available by governments or tax authorities in the countries we do business in. Where possible, we will seek to engage with local tax authorities to ensure there is an agreed understanding of the basis and validity on which we will claim tax incentives or exemptions.
ConvaTec uses external tax advisers where specific expertise is required, as well as for mitigating tax risks and complying with all tax laws.
ConvaTec fully supports the moves towards greater transparency with tax authorities and the initiatives being introduced to enable this. We recognize the needs of society to raise taxes, and we are fully committed to meeting our legal obligations in this respect.
We believe in being proactive with tax authorities, both in terms of early communication and to obtain agreement on areas which reduce uncertainty for both ConvaTec and the tax authorities. Our relationship with tax authorities is based on respect for the function they are performing and the legal framework in which we operate.
We review and update this annually. It was last approved on 12 October, 2016.