Compliance

Yinson’s tax governance is part of the oversight mandate of the Board of Directors, and this includes setting clear responsibilities and mechanisms to ensure timely tax compliance. In accordance with Yinson’s tax governance structure, the Board of Directors is responsible and accountable for the overarching management of our tax affairs and governance measures, and the day-to-day tax operations are delegated and managed accordingly by Group Tax in line with the requirements of Yinson’s tax strategy and policy.

Yinson’s Group Tax will work together with the Group’s business, operations and finance departments, to provide guidance for compliance with the tax regulations, whilst ensuring that business decisions and transactions are commercially sound and effectively considers the key tax implications. The business, operations and finance departments will seek input and guidance from Group Tax on the following:

• Business proposals to ensure a clear understanding of the key tax consequences and implications.
• Assessment and management of tax risks to ensure compliance with local and overseas tax regulations in respect of Yinson’s cross border related party transactions.
• Tax technical position to ensure that the stance taken is supported by appropriate documentation, legal interpretation and taking into account the practice adopted by the Tax authorities. Where required, external tax advice would be sought in consultation with Group Tax.
• Audits and enquiries from Tax/ regulatory authorities.

We employ comprehensive and robust tax governance measures, which effectively considers our tax (which can be defined as the relevant direct taxes, indirect taxes and transactional items) reporting obligations and requirements.

Our Group Tax policy has been implemented and operationalised, in line with our tax risk management measures. This policy has been approved by the Board of Directors, and it outlines Yinson’s key tax processes and the relevant lines of reporting and escalation.

Based on the principles set out above, our approach and attitude to tax planning is outlined as follows:

1. We are committed to using business structures with genuine substance, that are guided by commercial requirements and are aligned with our business activities. We do not:
   • Use artificially fragmented structures or contracts to avoid establishing a taxable presence in the countries or jurisdictions where we do business.
   • Engage in business arrangements which are solely focused on creating a tax benefit, which is not consistent with the ordinary course of the business and what is reasonably understood to be intended by the relevant tax rules.
2. We do not partake in abusive tax schemes.
3. Our operations and business transactions are guided by our overall business purpose, whilst taking into consideration the relevant tax impact.
4. We do not use tax havens for the purposes of obtaining tax benefits, and our current business model and selection of countries of operation are driven by substantive and commercial considerations.
5. We pay tax on profits/ income according to where value is created within the course of our commercial activities. Our tax principles extend to our relationships and communications with all employees, customers and contractors.
6. The transactions between the companies in the Yinson group are priced in accordance with the arm’s length basis, and reflects the economic reality of the transaction, in line with OECD’s principles and the prescribed transfer pricing rules in the countries we operate in.
7. Where available and appropriate, Yinson will utilise tax incentives and reliefs, provided it is supported with genuine commercial activity and aligned with the intended policy objectives of the Governments that introduced the incentives.

As part of our tax risk management, we monitor our transactions to effectively identify potential tax risk, in accordance with changes in the relevant tax laws and practices. This includes identifying and assessing/ categorising potential tax risk items (in line with the relevant risk profiles and Yinson’s overall risk appetite), monitoring and escalating/ reporting to the relevant parties within Yinson (in accordance with the tax risk escalation matrix, that has been mapped to Yinson’s wider risk management framework).

This is complemented by regular updates from external tax advisors, discussions/ dialogues with the professional bodies and Tax authorities, as well as participation in relevant seminars/ conferences. All relevant information and tax updates will be shared with the management and other related departments in a timely manner.

Whilst we aim to ensure that our tax positions are in line with the requirements of the tax laws and regulations, there may be instances where it may differ from the tax treatment prescribed by the Tax authorities. Where such circumstances arise, Yinson will work constructively with the Tax authorities to achieve a resolution for these tax matters.

Depending on the degree/ level of tax risk and the nature of the transactions involved, we will refer to the Board of Directors and the Board Audit Committee for approval and guidance on the decisions/ steps to be taken. Where required, we will obtain written advice from external tax and legal advisors on high-risk transactions or areas of uncertainty regarding the interpretation of the tax law, to support our decision-making process.

We seek to manage our tax affairs in a manner that is consistent with our tax strategy principles, alongside our team of qualified and trained tax professionals.

Yinson seeks to:

1. Deal and communicate with the Tax authorities and other relevant agencies in a collaborative, courteous and timely manner.
2. Engage with the Tax authorities to discuss the application/ interpretation of relevant tax laws and regulations.
3. Make fair, accurate and timely disclosure in correspondences, returns and any other relevant matters.
4. Address/ respond to queries and information requests on a timely basis, amicably resolve issues with the Tax authorities in relation to any disputed matters and request for a ruling/ confirmation on technical positions, where applicable and possible. Where we are of the view that our legitimate rights have been impeded, we will take the appropriate and necessary steps to safeguard the interest of the organisation.