Barilla International Limited - UK Tax Strategy
Barilla Group (hereinafter referred to as “Barilla” or “the Group”) is an Italian family-owned food company: established in 1877, it’s now a world leader in the markets of pasta and ready–to–use sauces in continental Europe, bakery products in Italy and crispbread in Scandinavia. Barilla carries out its activities on a global scale that also seeks individuals’ welfare through nutrition and environment protection, according to the motto “The joy of food for a better life”.
Barilla’s system of corporate governance, which was established in accordance with best national and international practice and standards, guides the organization and operation of its corporate bodies in the interests of the Group and of its shareholders, and is based on the principles of transparency, independence and responsibility.
Additionally, the Group has developed its own Tax Strategy approved by Barilla G.e R. Fratelli S.p.A. Board of Directors in its meeting of October 10th, 2018. The document summarizes the principles leading the Group in managing tax affairs, applying good tax practices and acting transparently, paying taxes on a responsible and efficient manner and promoting cooperative relations with governments, avoiding significant risks and unnecessary disputes.
This document sets out the tax strategy for Barilla International Limited and its subsidiaries as required by Part 2 Schedule 19 of Finance Act 2016. The document is effective for the year ending 31 December 2023 and will be periodically reviewed and updated.
Barilla International Limited approach to tax is inspired and completely aligned with the Group. The strategy applies to UK taxation, including corporation tax, indirect taxes (including customs and excise duties) and employment taxes which are payable and reportable to HM Revenue & Customs (“HMRC”).
The Group’s overall UK tax strategy is consistent with its Global Tax Strategy and the following specific tax goals:
- Risks and Reputation: Controlling and managing risks and preserving the Group's reputation for quality and brand excellence.
- Virtuous corporate culture: Promote awareness at all company levels of the importance attributed by the Group to the values of transparency, honesty, correctness and compliance with the law; to the diffusion of a culture of "control"; and to the principles of corporate social responsibility.
- Efficiency: Efficiently manage the tax costs linked to business activities, by making use of available government incentives and relief in a manner which fully complies with both the letter and spirit of the law, and reflects commercial transactions.
- Compliance: Ensuring integrity in tax compliance and the correct determination of taxes, according to related deadlines and requirements.
- Good faith and transparency in relations with the tax authorities: Establish relations with the tax authorities based on good faith, transparency and collaboration, so as to be recognized as a reliable counterparty.
- Enhancement of internal resources: Develop and strengthen the personal and professional skills of the resources involved in the tax processes and in the management of the associated risks.
Management of tax risks
To ensure that tax is managed in accordance with Barilla’s risk appetite, Barilla Tax practice team has developed an internal tax system of controls that lead tax processes in all the countries, including the UK.
The internal tax system of controls model set forth the following levels of control:
First level of control - Day to day management of tax risk and operational activities is delegated to individuals that are responsible for the application of relevant policies as well as procedures, the latter ensuring the proper tax treatment where needed.
Second level of control - Delegated to the Tax practice team, which is responsible for overseeing and monitoring the efficacy and effectiveness of tax controls.
Barilla Tax practice is comprise of an in-house team of tax professionals. The team engages third-party professional service providers for advice where required, given the complex and dynamic nature of tax law. Barilla in-house tax team is in regular dialogue with the wider business to ensure that tax obligations are properly considered in business decision making.
In addition, Barilla has set up a Tax Control Framework Committee at Group level, consisting of internal members and external members with tax expertise.
Attitude to tax planning
Barilla does not participate in aggressive tax planning, or tax practices and strategies that abusively erode its tax base. The Group does not enter transactions which are devoid of commercial substance or which have the aim of obtaining an undue or incorrect tax advantage.
On occasions the Group will use available tax incentives, reliefs and exemptions, provided these align with the Group’s commercial aims and the use of them is consistent with both the letter and the spirit of the law.
The Group works closely with external tax advisors and will take advice from these in cases where the tax analysis is unclear, subject to interpretation, where there is a significant degree of uncertainty, or where it is considered that the in-house tax team would benefit from such expertise in order to assess the tax risk.
The level of risk the Group is prepared to accept for UK taxation
Barilla has a low appetite for tax risk in the UK. The Group does not enter into transactions that are not aligned with our commercial objectives or which do not have a genuine commercial rationale. The Group actively pursues certainty in respect of its UK tax positions and aims to avoid unnecessary tax disputes.
To this end the Group seeks to adopt technically sound tax positions based on appropriate analysis and advice and supported by all appropriate documentation to evidence the position.
When considering tax risks Barilla takes the following into account when considering it’s short, medium and long term approach:
- The impact of any decisions on its relationship with HMRC;
- The importance of certainty of its tax position;
- The impact of making such decisions on the reputation of the Group, its brand and on the value underlying the principle of corporate social responsibility.
Working with HMRC
Barilla aims to act with integrity and full transparency in all its dealings with HMRC, working in a proactive and collaborative manner to ensure that it meets all of its legislative requirements and ultimately pays the correct amount of tax.
Barilla Group believes that a good relationship and cooperation with the Tax Authorities as the best way to manage reputational risk.