Our approach to tax
NN Group’s relationship with our stakeholders is based on our values: care, clear, commit. Throughout NN Group, these values drive the behaviour that is needed to realise our company’s purpose: we help people care for what matters most to them.
Acting on the basis of these values also has an impact on how we look at tax. We believe that paying tax is more than a ‘cost of doing business’. Our tax contributions play an important role for the communities in which we operate. These communities are those in which employees and customers live and where we find a market to offer our products, do our business and realise our strategy.
Being a responsible tax payer means that in our tax planning we take due account of long-term considerations and carefully weigh the interest of all stakeholders of NN. We therefore believe that it is essential to have a set of guiding tax principles we adhere to, but also that we communicate clearly about our approach to tax and our tax position.
We pay our taxes promptly and in accordance with all applicable laws and regulations in the countries in which we operate and are guided by relevant international standards such as the OECD Guidelines. We aim to take account of the letter as well as the spirit of the tax laws and regulations.
We seek to resolve any uncertainty in the interpretation of the tax laws directly with tax authorities. We may also seek a co-operative compliance approach, which involves regularly and proactively engaging with tax authorities and providing them with real-time information before filing the tax return. These arrangements offer an opportunity for early resolution, minimising the risk of future disputes. Where necessary, we will seek a clear resolution through the judicial system to test the legal principle of the tax law concerned.
We believe that tax is an integrated part of doing business and not merely the domain of the tax function. We believe in the principle that tax should follow business and consequently profits are allocated to the countries in which business value is created. For calculating transfer prices, we apply the arm’s length principle.
Tax is one of the elements we take into account in our commercial and economic activities, while businesses may also respond to available tax incentives and exemptions.
Relationship with tax authorities
Wherever we operate, we seek to establish and maintain an open and constructive dialogue with tax authorities and other government bodies, based on the disclosure of all relevant facts and circumstances. In this dialogue we seek to provide clarity and establish certainty on all relevant local tax components in advance.
NN Group is qualified as one of the ‘Top 100 for profit companies’ as defined by the Dutch Tax Authorities in their 2021 updated tax monitoring model. As such, the Dutch Tax Authorities shared in 2021 with NN Group their Individual Monitoring Plan (IMP). The IMP describes how NN Group is perceived by the tax authorities on its activities, inherent tax risks and tax compliance. The Dutch Tax Authorities consider NN Group as tax compliant and transparent on their tax affairs. The Dutch Tax Authorities acknowledge the Tax Control Framework approach being implemented by NN Group Tax.
To act upon our tax principles, NN Group has designed and implemented a Tax Control Framework (TCF) that relates to NN Groups tax affairs. The TCF provides NN Group Tax with the framework and tools to manage their responsibilities. The existence of an adequate TCF is required by the Dutch tax authorities as an important element of the IMP. The TCF is not a static framework but is continuously monitored and improved by NN Group Tax following business developments and changes in tax law and regulations. More information of the TCF can be found in the Tax Group Charter.
We believe that the NN Tax Function may engage in tax planning initiatives and make use of incentives promoted by government authorities. However we also believe that with such planning due consideration needs to be given to NN’s legitimate interests, reputation, brand and corporate social responsibility.
We have clear procedures in relation to tax risk management and carry out risk assessments as part of any tax planning on significant transactions. We do not enter into aggressive and contrived tax planning structures. We therefore do not use secrecy jurisdictions or so-called ‘tax havens’ for tax avoidance, nor artificial tax structures that have no commercial or operational substance.
We further believe that our products should not be used by our clients to shelter information from the tax authorities and to avoid taxation.
We are transparent about our approach to tax and our tax position. Disclosures are made in accordance with the relevant domestic regulations, as well as applicable reporting requirements and standards such as IFRS. We strive for an open dialogue on tax matters with governments, policymakers, businesses, investors, and civil society. On an annual basis, we publish a Total Tax Contribution Report in which we report on our total taxes paid and collected on a country by country basis.
Accountability & Governance
NN Group Tax is in constant dialogue with NN Groups’ senior management and NN Groups business. This ensures that NN Group´s (senior) management is engaged and involved in all relevant tax matters. Within NN we adhere to our Code of Conduct ensuring our accountability and governance. Our Tax Policy is in line with our Code of Conduct.
We operate in accordance with a Tax Risk Management policy approved by our Management Board.
Annually, the Audit Committee performs a deep dive into the present position and future developments in respect of corporate income tax and any other relevant tax regulations, the Group’s tax strategy and tax transparency developments. The NN Group Tax team updates the Audit committee on the material tax risks and mitigating actions taken.
Hence, NN Groups Management Board and the Audit Committee oversees NN Groups tax position as a core part of corporate responsibility and governance and is accountable for NN Groups tax strategy.
The tax function is organised within NN Group to ensure compliance with tax laws and regulations in the countries where it operates. NN Group’s Global Head of Tax leads a team of in-house tax advisors and tax accountants/consultants, with a combination of accounting, tax and business economics qualifications .The NN Group Tax department has a global responsibility for the tax position of NN Group. In executing this responsibility, it takes account of long-term considerations and carefully weighs the interest of all stakeholders. The NN Group Tax team regularly monitor relevant changes and developments in tax systems, reviews NN Group’s corporate and financing structures to confirm that our presence in all countries is grounded in substantive and commercial reasons. Based on required expertise and capacity, businesses within NN Group will also make use of external tax advisors. External tax advice must be compliant with the tax strategy of NN Group Tax. To safeguard the interest of NN Group and the alignment with this strategy, the primary point of contact for external tax advice is NN Group Tax.
The NN Group Tax team is part of the Group Finance function reporting to the Chief Financial Officer (CFO). The NN Group Tax team annually reviews the implementation and execution of the tax strategy and reports the outcome to relevant internal stakeholders. The CFO receives frequent updates throughout the year from the NN Group Tax team. Also, on a quarterly basis, an update on tax is provided to the financial committees within NN Group in which the CFO, the Chief Risk Officer (CRO) and Heads of Finance departments are represented.
More information on the organisation, roles and responsibilities of the NN Group Tax department, can be found in the Group Tax Charter.
Group Tax Charter (PDF 517 KB)
Total Tax Contribution
Besides taxes that NN Group pays as a taxpayer, which represent a cost for our company, we are also responsible for collecting taxes on behalf of our clients, employees, or service providers, and passing them on to tax authorities. By bringing together all relevant information about these taxes, NN Group aims to improve the understanding of its business and its approach to tax.