HERMES UK TAX STRATEGY

 

In compliance with section 161 and section 19(2) of schedule 19 Finance Act 2016, this document sets out Hermès Group’s policy and approach to conducting its tax affairs and dealing with tax risk in the United Kingdom. The document is effective for the year ending 31 December 2025.

1. Scope

This strategy will apply to the following UK companies:
• Hermès Holding GB Ltd
• JL&Company Ltd
• Hermes (G.B.) Limited
• Grafton Immobilier SASU
• Hermès Parfums GB Ltd

The following taxes are in scope:
• All direct taxes including Pay As You Earn (PAYE) and corporation tax
• All indirect taxes including VAT and Customs and Excise duty

2. Approach to tax planning and level of risk

The Hermès group is focusing on preserving its reputation, especially its reputation as a responsible tax payer.

Our strategy is:
• to satisfy the UK tax rules and ensure payment of taxes in due time and in accordance with the applicable tax rules;
• to prepare and retain the documentation required by the tax law or which will be needed in case of a tax audit.

In relation to cross-border transactions, the Hermès companies apply the OECD standards and ensure that the transfer pricing policies implemented respect the “arm’s length principle”.

Where tax law is unclear or subject to interpretation, the Group follows the generally understood interpretation of tax law professional or may ask advice or advance clearance from tax authorities to ensure Hermès’s position.

The Group takes a conservative approach to tax planning and does not pursue aggressive tax planning arrangements. When studying tax solutions, the Group will not implement schemes that would disconnect from the conduct of its business or its organization. The Group is strongly opposed to enter into artificial tax planning arrangements.

3. Tax governance and organization

The Board of Directors of each UK company has responsibility for fully complying with the tax laws in the UK. However, management authority for the day to day operation of the business is delegated to the Finance Director, as tax is part of the finance function.

For the entire group, the tax function is lead in France by the Director of tax who leads a team of experienced tax professionals with geographic responsibilities. Matters where the Group tax department considers there is insufficient skill or experience internally are referred to external professional advisors who have suitable knowledge of the company, and hold suitable tax qualifications and relevant experience.

Concerning tax compliance, the annual tax returns of the UK subsidiaries are prepared and reviewed by one of a largest professional services firm in the world.

In compliance with the Revised EU Audit Directive’s recommendations on non-audit services provided by external auditors, tax advisory and compliance services within the EU are not procured from the Group’s external auditor.

4. Relationship with HMRC

The group engages with tax authorities in an open and transparent way in order to minimize uncertainty.

It is committed to working in a collaborative, transparent and professional way with HMRC at all times.

Where tax enquiries or audits are opened, the group adopts a proactive approach to the provision of information to the relevant tax authorities in order to aid the resolution of any matters under review. In case of tax audit, Finance Director works with the Group tax department and external advisors to provide transparent information to any question raised by HMRC.