Our approach to tax
NN considers taxation to be a sustainability matter. Taxation, contributing to public finances and the instrumental use of taxes are vital in achieving sustainability goals. A responsible tax approach is essential to good corporate citizenship. Being a responsible taxpayer means that we contribute to public finances in the countries where we operate, we take long-term considerations into account, and we carefully weigh the interests of all stakeholders. The Head of Group Tax annually validates the global tax strategy to ensure it aligns with NN’s ambition, strategy and values.
NN believes it is essential to have a set of guiding tax principles to adhere to. The principles of conduct are derived from the global tax strategy and are defined in the NN Global Tax Policy and Principles of Conduct (Global Tax Policy). The principles of behaving responsibly mean the timely paying of our fair share of taxes in the countries where we operate.
The Global Tax Policy is reviewed and approved by the NN Group Management Board and Executive Board every three years or when revised at an earlier timeframe.
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 both the letter and 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 cooperative 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 was identified as a Top 100 for profit company by the Dutch tax authorities in their 2021 updated tax monitoring model. The Dutch tax authorities updated their Individual Monitoring Plan (IMP) with NN Group in 2023. 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 tax affairs. The Dutch tax authorities acknowledge the Tax Control Framework (TCF) approach being implemented by the NN Group Tax Function.
The NN Group Tax Function has designed and implemented a framework that includes tax risks and controls in line with the Global Tax Risk Management Policy. The TCF is not a static framework but is continuously monitored and improved by the NN Group Tax Function following business developments, changes in tax laws and regulations, and the learning circle. More information on the TCF can be found in the Group Tax Charter.
We believe that the NN Tax Function may engage in tax planning initiatives and make use of incentives promoted by government authorities as long as these are generally available. 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 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. We publish an annual Total Tax Contribution Report in which we report on our total taxes paid and collected on a country-by-country basis.
Accountability & Governance
The NN Group Management Board and the Audit Committee oversee NN Group’s tax position as a core part of corporate responsibility and governance and is accountable for NN Group’s tax strategy.
NN Group Tax is in constant dialogue with NN Group’s senior management, business units and head office functions. This ensures that NN Group’s senior management is engaged and involved in all relevant tax matters. Within NN we adhere to the NN Code of Conduct ensuring our accountability and governance. Our Tax Policy is in line with the NN Code of Conduct.
We operate in accordance with a Tax Risk Management policy approved by our Management Board.
The Audit Committee performs an annual deep dive into the present position and future developments in respect of corporate income tax and any other relevant tax regulations, NN 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.
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 Function 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 Function continuously monitors relevant changes and developments in tax systems and regularly 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, business units within NN Group can also make use of external tax advisors. External tax advice must comply with the Group tax strategy and the Global Tax Policy and principles of conduct. To safeguard the interest of NN Group and the alignment with the Group tax strategy and Global Tax Policy and principles of conduct, the primary point of contact for external tax advisors is the NN Group Tax Function.
The NN Group Tax Function is part of the Group Finance Function reporting to the Chief Financial Officer (CFO). The NN Group Tax Function annually reviews the implementation and execution of the Global Tax Policy and Principles of Conduct and reports the outcome to relevant internal stakeholders. The CFO receives frequent updates throughout the year from the NN Group Tax Function. 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.
Impact of sustainability on taxation
At NN, we recognise the impact that sustainability developments have on taxation and simultaneously the impact that taxation has in helping create a more sustainable world. Taxes can play a vital role in achieving the Sustainable Development Goals (SDGs) and help create a more sustainable world through enhanced public services and investments. We support the instrumental use of taxes as means to change behaviour. Through paying the right amount of tax, at the right time and place, NN is committed to contributing to society.
We continue the dialogue on taxes with our stakeholders through public tax reporting. We extensively report on our total tax contribution on a country-by-country basis. We do not include environmental taxes (e.g., a carbon, plastic or sugar tax) as currently these are not material, nor do they generally apply to NN’s business. Read more in our Total Tax Contribution Report.
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 in our Total Tax Contribution Report, NN Group aims to improve the understanding of its business and its approach to tax.