ECCO Group - Tax Strategy - 2020
The ECCO group was founded in 1963 by Karl Toosbuy. The headquarters of the ECCO group is located in the town of Bredebro in south-western Denmark.
The ECCO business model is rather unique within the shoe industry as ECCO owns and operates the entire value chain from “cow to customer”. The Group operates in most segments of the footwear market (Men, Women and Kids) and in selected segments of the sports shoe market (namely Golf, Outdoor and Walking).
Sale of ECCO products is conducted in 2,100 shops around the world and are handled by a mix of ECCO-owned subsidiaries, joint ventures and third party distributors. Sales are made through a mix of sales channels such as wholesale and retail.
It is a part of ECCO’s code of conduct that “ECCO will only achieve long-term business success by demonstrating good corporate citizenship…” This is seen through ECCO’s general approach to tax, which is 100 % commitment to tax compliance everywhere ECCO operates. We consider our tax payments as a contribution to the communities in which we operate, as part of our social value creation.
Risk management and governance arrangements
The management of the daily tax matters are administered by Group Tax at ECCO headquarters. Group Tax reports to the VP of Group Tax, who together with the ECCO Tax Committee is responsible for the tax strategy and management of the tax risks for the ECCO group.
It is the responsibility of Group Tax to ensure that ECCO is compliant in all tax matters, but also that ECCO’s business is conducted in the most tax efficient manner. Group tax seeks to be compliant to tax legislation by making sure that ECCO meets relevant deadlines in regards to payment and filing.
ECCO’s objective is to be compliant with all relevant tax legislation. The overall approach is to support the commercial needs of the business in the most tax efficient manner, but at the same time be compliant with all relevant laws and take into account all stakeholders interest. The strategy is to pay the correct amount of tax, at the right time.
ECCO products are sold in 101 countries, globally. ECCO never uses tax havens (low or nil tax jurisdictions) to avoid taxes. ECCO’s business structures are always driven by commercial considerations alone.
ECCO is aware that all business decisions are affected by tax and tax risks. Consequently ECCO seeks to make tax compliance a part of the decision making process, and hereby try to avoid any tax disputes or risks in the future. E.g. where possible ECCO will enter into advance pricing agreements (APAs) to mitigate tax risks.
Attitude towards risk
ECCO is not involved in aggressive tax planning but rather take a conservative approach. The Group will choose the most tax efficient approach, but always in compliance with the relevant legislations. The tax strategy takes into account all stakeholders interests.
ECCO realizes that tax compliance is increasingly complex and therefore ECCO tries to act in a proactive way to ensure that all taxes are paid in due time and according to the legislation in the countries where ECCO operates. The attitude towards tax risk is low and this is why ECCO seeks to be compliant in all tax matters. Where relevant Ecco will consider advance pricing agreements (APAs) to mitigate tax risks and avoid disputes.
Working with Tax Authorities
From ECCO’s code of conduct: “No matter where in the world ECCO operates, this is done according to a set of principles which stipulate that we will behave in a correct and decent manner. This is our heritage as a Danish company.”
To meet this intent, ECCO’s focus is to provide tax authorities worldwide (i.e. HRMC, IRS and SKAT) with timely tax compliance. Also it is the objective of ECCO Group Tax to seek an open and constructive dialogue with all tax authorities in a transparent way.
ECCO is open to further disclosures, such as country-by-country-reporting, provided these do not harm its competitive position.
ECCO wishes to work with tax authorities in a proactive way, to minimize the risk of disputes.
ECCO regards the publication of this tax strategy as complying with the duty under United Kingdom legislation, paragraph 16(2) of Schedule 19 of the Finance Act 2016 to publish the group tax strategy in the current financial year (2020).