Statement of Aegon Global Tax Policy and Principles of Conduct

Aegon UK tax strategy

The Aegon UK tax strategy adopts the Aegon Global Tax Policy and Principles of Conduct, which is published on the Aegon N.V. website, as adapted for specific UK reporting requirements which are highlighted below. The UK tax strategy applies to all UK companies in the Aegon Group and this statement meets our obligation to disclose our strategy as required by Finance Act 2016.

Aegon as a responsible taxpayer

We've adopted a Statement of Global Tax Policy and Principles of Conduct (“GTP”) which is derived from Aegon’s Code of Conduct, the Core Values, Business Principles, and Rules of Conduct contained therein, and from its Statement of Responsible Business.  The principles and objectives of the GTP apply to all taxes that we encounter in the course of our business.

Acting as a responsible taxpayer is part of the Aegon Value Chain and, in the context of the GTP, means that we seek to pay 'fair' taxes. We recognise that the concept of 'fair' taxes is inherently challenging for a complex multinational business such as Aegon’s and that, in a global business world with global tax competition among nations, it isn't always clear where appropriate lines can or should be drawn. However, for Aegon, the concept of fair taxes means being a responsible taxpayer that pays the right amount of taxes in the right places. This means we recognise our obligation to pay taxes. However, that obligation doesn't extend to paying more taxes than required by the law. Therefore, our approach to responsible taxpaying will seek to align the long-term interests of all our stakeholders, including customers, employees, business partners, investors, and wider society.

Our principles of responsible taxpaying

The following principles will guide our approach to tax as a responsible business:

1. Compliance
We're committed to tax compliance that is focused on complete, timely, and accurate tax filings in accordance with the legal requirements of the applicable tax laws and regulations in the jurisdictions in which we operate. Additionally, we'll seek to take into account not only the letter but also, when clearly discernible, the spirit of the law.
2. Relationships with tax authorities
We'll seek to develop and maintain open, constructive, and cooperative relationships with tax authorities, based on integrity and mutual trust and respect. We'll respond to queries from tax authorities within agreed timescales and aim to discuss with them before filing tax returns, new material activities, risks, events and interpretations of the law where this is unclear.
3. Transparency
This principle includes developing and maintaining transparency in our relationships with tax authorities, but also encompasses broader concepts, including public discussion of and public disclosures around such matters as:
  • the policies and principles of how our tax affairs are approached;
  • how the GTP is implemented and the overall governance and oversight of our tax position;
  • taxes provided in our financial statements, and
  • tax payments by country or region in which we have significant business operations or income
At least yearly, we'll re-evaluate the subject of tax disclosures and transparency.
4. Uncertain tax positions
We'll seek to avoid uncertainty and unexpected results in our tax position. However, tax laws may be unclear or subject to interpretation. In such cases, we'll strive for at least a 'more likely than not' (a likelihood of more than 50%) level of comfort that our tax position will ultimately be upheld. Additionally, our tax approach will consider our corporate social responsibilities, our reputation, and our brand as factors which may override even a more likely than not technical tax position. Where appropriate, we'll support our internal evaluation of the strength of our technical tax position with advice from qualified external tax counsel. This will include circumstances where there is insufficient internal resource or expertise, particularly when considering tax planning on new activities.
5. Tax avoidance / Tax planning
We'll endeavour to align our tax position with the objectives and undertakings of our business units and with our overall business strategy so as to manage our tax position to provide sustainable outcomes within the parameters of our strategic and commercial objectives. For these reasons, we'll not engage in 'artificial' transactions merely to generate tax benefits. We use tax planning to access tax incentives provided for in legislation.
6. Low tax rate or no tax jurisdictions
We may operate in low tax rate or no tax jurisdictions for legitimate and justifiable non-tax business reasons. However, we'll endeavour to allocate profits where value is created through commercial business activity. We won't use these so-called 'tax havens' merely for tax reduction purposes.
7. Transfer Pricing
Our global transfer pricing policy conforms with international best practices and is based on the arm’s-length principle as supported by economic analysis and formal documentation of the commercial nature of the transactions.
8. Tax incentives
We may make investments in assets, or engage in transactions, where tax incentives, exemptions, or other tax benefits are specifically authorised by laws and/or regulations of a jurisdiction in which we operate and which don't result in a selective advantage placing us in a more favourable financial position than other similarly-situated taxpayers.
9. Products
We may design and price our products to achieve tax benefits that are specifically authorised by the government of a jurisdiction in which we operate. However, we won't knowingly provide assistance or encouragement to customers to abuse tax laws and regulations.
10. Tax rulings
We may seek rulings from tax authorities to confirm the applicable tax treatment of an investment, a restructuring, or a transaction based on a full disclosure of all relevant facts and circumstances. We won't seek special tax treatment that isn't specifically authorised by the government of a jurisdiction in which we operate or which would result in a selective advantage placing us in a more favourable financial position than other similarly-situated taxpayers.
11. Tax lobbying and advocacy
We'll regularly and actively engage with governments and tax authorities regarding the constructive development of tax policy, legislation, and regulatory and administrative guidance.
12. Risk management, accountability, and governance
Our business principles require identification and prudent management of risk. We'll use robust governance practices that are required to maintain and control tax affairs and risks accordingly.

Tax risk management and governance

An important part of our tax risk management process is our Tax Control Framework ('TCF'). The TCF will include control measures to identify, assess and manage the tax risks to which we're exposed. The purpose of the TCF will be to ensure that robust documented policies, systems, processes, and controls are in place to support required tax filings and payments and, more generally, to support the responsible management of our tax risks. We carry out periodic reviews and testing of processes and procedures to ensure the TCF remains effective and that no material deviations from acceptable practices have occurred.

The GTP is subject to a global oversight and control framework that is implemented and administered as follows:

  • The GTP is approved by the Management Board  and reviewed with and endorsed by the Audit Committee of the Supervisory Board of Aegon N.V.   Implementation and operation of the GTP, as well as reports on our global tax position, will be reviewed and discussed with the Audit Committee on a regular basis, no less than annually.
  • Aegon N.V.’s Chief Financial Officer, supported by the Corporate Center Tax function, is responsible for the global tax position. Business Unit/Country Unit management will establish Local Tax Policies in line with the GTP and will authorise their local tax functions to execute such local policies and to maintain processes, procedures, and controls necessary to their proper implementation and execution. A GTP Implementation Guide, developed by Aegon’s Corporate Center Tax function, will support this requirement.
  • The Corporate Center Tax function has oversight of Business Units/Country Units to ensure that Local Tax Policies are established and executed in accordance with the GTP. Execution of the Corporate Center Tax function’s oversight role will involve such governance and reporting structures as necessary and appropriate to conform with Aegon’s Global Governance Framework.
  • The Aegon Global Transfer Pricing Framework will be administered by a Transfer Pricing Committee consisting of members of local and Corporate Center Tax functions that will have oversight of and govern transfer pricing for all major local and cross border internal transactions.  
  • A Tax Risk Oversight Committee will exercise governance over certain global tax matters and issues.