VINCI’s highly decentralised organisation is structured around business lines and operating subsidiaries, rather than by country or geographical area. The Group’s substantial expense relating to taxes, fees and other compulsory payments represents a significant portion of its contribution to the economies of the countries where it operates. The Group meets its tax obligations, in full compliance with applicable local and international laws and in line with VINCI’s intangible and universal commitments.
In accordance with VINCI’s Code of Ethics and Conduct, as well as its general guidelines, strict compliance with applicable laws and regulations is a core principle for the Group, one that must be followed in all circumstances by every employee and every business unit in the countries where they operate.
Due to the specific features of VINCI’s business model and its activities, which are primarily local, the Group’s entities tend to favour local suppliers for their purchases of goods and services. For this reason, cross-border transactions between its various companies are limited and not material, as they primarily concern umbrella brand royalties, parent company services and short- or medium-term financing for operational requirements or external growth. The invoicing principles applied follow the OECD Transfer Pricing Guidelines. These guidelines incorporate the recommendations resulting from the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, and in particular Actions 8-10 “Aligning Transfer Pricing Outcomes with Value Creation”, supplementing the Group’s adherence to the arm’s length principle.
Given the autonomy granted to the Group’s subsidiaries, the main tax risks that may arise in connection with their activities relate to the diversity, scale and/or complexity of their operations. These risks mainly relate to tax compliance (late filing of returns, inaccurate returns or omissions in returns) or technical aspects (lack of formalisation, misinterpretation of rules, unanticipated changes in legislation, etc.), but may also have a reputational impact.
Tax issues, like all other financial information, are reviewed on a regular basis by the CFOs of all Group entities, particularly during calls for tenders, at each budget phase, in connection with the preparation of annual and interim financial statements, and whenever required. Each CFO reports directly to the entity’s chairman, to the members of its Board of Directors or other competent supervisory body, as well as to the CFO at the next hierarchical level.
As expressly indicated in the Group’s general guidelines, the CFOs must ensure that financial data is presented in accordance with the standards, principles and procedures in force. Financial data, which includes tax data, is reported, managed and verified using reliable accounting systems that are regularly monitored to ensure that they are functioning efficiently and audited. The employees who use them are provided with training.
For any tax issue, the CFOs can request assistance from the Group’s tax experts, at each division’s main holding companies, in the business lines and at VINCI SA level, and/or external tax advisers, depending on the issue’s complexity and materiality. Any outside consultant providing assistance must pledge to abide by the values expressed by VINCI and particularly those set out in its Code of Ethics and Conduct.
VINCI takes the tax consequences of its operating activities and/or its investments into account and may make use of the options provided by local regulations to alleviate its tax or administrative burden. For instance, VINCI uses the legislative arrangements for research tax credits or accelerated depreciation, creates tax consolidation groups in the countries where this is possible, and benefits from the exemptions offered by local government structures for carrying out projects with multilateral financing. Nevertheless, in all cases, the Group’s fundamental principle is to reject the use of aggressive tax planning or other artificial structures designed in particular to avoid paying taxes, as well as any participation in other arrangements mainly for tax purposes that would offer no real commercial advantage. Similarly, whenever VINCI maintains a presence in a country considered as a tax haven, it is uniquely as a result of its operating activities. If a tax risk is identified, proportionate solutions are designed and implemented, in collaboration with the relevant tax and financial teams, in order to minimise this risk. These analyses and solutions are regularly updated in line with changes in projects and the Group’s organisation, as well as legal and regulatory developments. Whenever necessary, they are discussed and reviewed with auditors and/or the competent tax authorities.
One of the Group’s key expectations of its subsidiaries is that they maintain transparent and constructive relations with the tax authorities in each of the countries where they operate. In April 2019, in line with this commitment to transparency and cooperation, VINCI SA and its consolidated subsidiaries signed up to France’s new tax partnership programme, founded on trust-based relationships and one of the measures implemented under the Government Reform Act for a Trust-based Society (ESSOC).
Furthermore, in 2023 VINCI will publish a first certified report describing the Group’s tax policy and its tax and social contributions, both in France and abroad, in respect of 2022.
