ECCO Group - UK Tax strategy - 2017
ECCO regards the publication of this tax strategy as complying with the duty under paragraph 16(2) of Schedule 19 of the Finance Act 2016 to publish the group tax strategy in the current financial year (2017).
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.
ECCO EMEA Sales SE (branch UK) is a sales branch of ECCO EMEA Sales SE where the scope of activity is to purchase, sell, distribute and market shoes and accessories for men, women and children in the UK.
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.
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. The strategy is to pay the correct amount of tax, at the right time.
In regards to intercompany transactions between ECCO EMEA Sales SE (branch UK) and other ECCO entities, ECCO applies the guidelines provided by OECD (Organization for Economic Co-operation and Development) and UK legislation.
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.
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.
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.
Working with HMRC
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 HMRC with timely tax compliance. Also it is the objective of ECCO Group Tax to work with the HMRC in a transparent and honest way.
ECCO wishes to work with the HMRC in a proactive way, to minimize the risk of disputes.