Celanese - The chemistry inside innovation


Purpose

Celanese Corporation (“the Company”) is a global technology and specialty materials company. We are one of the world's largest producers of acetyl products, which are intermediate chemicals, for nearly all major industries, as well as a leading global producer of high performance engineered polymers that are used in a variety of high-value applications.

Our business activities around the world subject Celanese to a substantial and variety of business taxes. We pay corporate income taxes, customs duties, excise taxes, stamp duties, employment, and many other business taxes in all jurisdictions where applicable. In addition, we collect and pay employee taxes and indirect taxes such as Value Added Tax (VAT). The taxes we pay and collect represent a significant contribution to the countries and societies in which we operate.

In addition, an integral part of the Celanese culture is to engage with the communities where we operate. Our ambition is to make a difference in the communities and within our corporate culture by creating stronger teaming and a shared purpose of service. Celanese has also raised the bar on creating a safe workplace for our employees and reducing our impact on the environment.

We operate policies and governance to ensure compliance with tax laws in the territories in which we do business. We are committed to transparent and constructive relationships with all relevant tax authorities. We support initiatives to increase public trust and transparency in national and international tax regimes, and we engage with our stakeholders to build understanding and clarity of business tax consequences wherever we operate.

Celanese’s values, established in our Business Conduct Policy are the foundations for our approach to taxation.

To fulfill the new requirements under UK law1, and to support transparency of our approach to taxation, this document sets out:

  • Our approach to governance and risk management,
  • Our attitude towards tax planning, and
  • Our approach to dealing with tax authorities.

1 Our Tax Policy complies with the UK legislative requirement under paragraph 16(2) Schedule 19 Finance (No.2) Bill 2016.

Our approach to governance

The responsibility for the tax strategy, the supporting governance framework, and management of tax risk ultimately sits with the Chief Financial Officer (CFO). The day-to-day responsibility for each of these areas sits with the Vice President of Tax, who reports to the CFO.

The Board of Directors (the “Board”) of Celanese Corporation, whose members are elected by the Company’s stockholders, is the ultimate decision-making body of the Company, except with respect to matters reserved to the stockholders. The governance practices of the Board are designed to promote principled actions, effective decision making, and appropriate oversight of both compliance and performance by the Board and management. The Audit Committee (the “Committee”) of the Board of the Company shall assist the Board in monitoring and overseeing activities such as: accounting and reporting practices as well as compliance with legal and regulatory requirements regarding such accounting and reporting practices; the quality and integrity of the financial statements of the Company; and internal controls and compliance. The Committee also provides oversight for financial matters by periodically reviewing and discussing with management, and when appropriate, making recommendations to the Board, regarding certain financial topics, which includes the Company’s tax strategy, including tax planning and compliance.

How we manage risk

Tax risk can arise from unclear laws and regulations as well as differences in interpretation. As is common for many multinationals, Celanese’s most significant source of uncertainty arises where two or more governments adopt different interpretations in relation to pricing intercompany cross border transactions; i.e., the transfer pricing of goods, services and financing between related party members of the Celanese group of companies resulting in the same income being taxed in two or more territories.

Our approach is to manage tax risks and tax costs in a manner consistent with applicable regulatory requirements and with shareholders’ best long-term interests, considering operational, economic, and reputational factors. We have established and maintain robust controls and compliance processes to ensure the integrity of our tax returns as well as timely and accurate tax payments in all countries in which we operate. This includes ensuring that our tax professionals and staff have the necessary training to manage our tax position appropriately. Internal controls and escalation procedures are put in place with the aim of identifying, quantifying, and managing key risks. The Celanese group also operates a comprehensive management approvals process whereby all material transactions and proposed changes to business operations require prior approval from senior management including the VP of Tax.

The Board is responsible for overseeing the major risks facing the Company (including tax risk) and assists in developing strategies to maintain these risks. The tax consequences of significant commercial transactions are considered by the Board as part of its deliberations on the transactions in question.

Our attitude towards tax planning

The Company will not engage in artificial transactions the sole purpose of which is to reduce tax (in the UK or any other jurisdiction). However, the Company will consider undertaking a transaction in a way that gives rise to tax efficiencies providing this is aligned to the Company’s commercial objectives and complies with the associated tax legislation. The Company will not engage in tax efficiencies if the underlying commercial objectives do not support the position, or if the arrangements impact upon the Company’s reputation, corporate and social responsibilities, or future working relationships with tax authorities (including HMRC).

The Company has an in-house tax department, staffed by qualified, experienced tax professionals, which undertakes the great majority of tax activities. However, we recognize that tax is an increasingly complex area and it may, on occasion, be appropriate to seek external views. Tax planning or structuring advice may be sought in the context of complex transactions, principally to provide challenge to technical interpretation and ensure compliance with relevant statute and to ensure that business decisions are undertaken in the full knowledge of current and likely interpretations of legislation and guidance.

Our approach towards dealing with HMRC

We seek to develop and maintain professional and transparent relationships with tax authorities, which includes HMRC. We ensure there is access to relevant information demonstrating the integrity of our tax processes, returns, and payments. We also engage with governments on proposed changes to tax legislation where appropriate, either directly or via representative bodies.

The Company operates in a limited capacity in the UK and considers the level of acceptable risk in this jurisdiction as low.

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