MAPFRE has a global corporate tax policy which is publically available here: https://www.mapfre.com/corporate/images/corporate-tax-policy_tcm885-164580.pdf
The UK group of MAPFRE adheres to this policy, which takes priority over this addendum, which has been developed to include additional information about the UK group’s tax strategy in accordance with the duty outlined in schedule 19 of Finance Act 2016.
MAPFRE operates in the UK through three underwriting branches of Spanish Insurance companies. The group also has six UK incorporated subsidiaries providing support services and insurance broking and also holds UK commercial property as a non-resident landlord. We outline below the trading activity of each branch.
- MAPFRE Asistencia: portfolio of travel, home emergency and ancillary automotive insurance products
- MAPFRE Re: Reinsurance treaty underwriting in short tail lines of business. Marine & non marine treaty underwriting through London brokers
- MAPFRE Global Risks: International insurance solutions for large companies
The UK group is fully aligned with the global Tax Policy. We have outlined further detail below with regard to how the UK group manages its tax affairs in accordance with the duty outlined in schedule 19 of Finance Act 2016
Approach to Risk Management and Governance
The global Tax Policy outlines the expected standard of conduct by which the global tax affairs must be undertaken. The UK group adheres to this policy with compliance implemented and monitored by a senior member of the management team who is responsible for tax at each entity (Assistance, RE and Global) in the UK. This can be the finance director, the CEO or a similar role, depending on the specific entity.
Our tax risks fall into three broad categories:
- Compliance Risk
The risk that UK tax returns will not be submitted on a timely or accurate basis is mitigated by the group strong financial systems and internal controls framework. In addition the UK group engages external advisors to advise on or prepare certain UK tax filings where the necessary expertise is not available in-house.
- Transaction Risk
In line with our corporate governance framework a risk assessment is undertaken for all material business. As part of this assessment, tax risk is assessed by external tax advisors and group tax to ensure we stay within our risk appetite.
- Legislative Change Risk
Legislative and regulatory changes pose risk to our business and customers. We mitigate this risk by attending industry events and receiving UK tax updates from our external tax advisors.
The Tax Department of the MAPFRE GROUP supported by the UK finance function are responsible for the design and implementation of the internal procedures and control mechanisms to mitigate the risks described above.
The Tax Department, through the General Counsel, shall inform the Board of Directors of any tax implications concerning issues submitted for its approval should they be relevant for decision making.
As a consequence of the Global Tax Policy, all relevant tax matters are reported upwards by the person responsible for tax to a higher level. Therefore, relevant UK tax matters are reported by the UK finance director, CEO or similar person in charge of tax matters to a higher level, the Tax Department of the MAPFRE GROUP, and ultimately to the Board of Directors, if necessary.
Attitude to Planning
Our approach to UK tax planning is fully aligned to our global Tax Policy which states that we will only undertake reasonable interpretation of tax laws, in line with the underlying economic reality. In this sense, MAPFRE shall not use artificial tax structures and its business decisions shall not be aimed at moving tax bases to countries with low taxation or benefitting from artificial tax advantages, which do not correspond to the underlying economic reality.
In compliance with transfer pricing guidelines existing in many of the countries where MAPFRE operates, intra-Group operations shall be adjusted to market prices.
MAPPRE will not accept any risk that would prevent it from meeting its strategic objective. As such the UK group’s tax risk appetite is low. The governance structure described above ensures we understand our risks, including tax, and we manage these risks with our risk appetite.
Approach to Dealing with HMRC
MAPFRE is committed to maintaining a regular and open dialogue with HMRC on UK tax matters and would seek to obtain an early agreement with HMRC on complex transactions, before undertaking them.
This is fully aligned to the global tax policy which promotes the principles of transparency, mutual trust, good faith and loyalty when dealing with tax authorities.