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Klarna UK Tax Strategy 2022.
Klarna AB Bank (Publ) (“Klarna”) is a Swedish, privately held corporation. Klarna is headquartered in Stockholm, Sweden and has operations, directly and through its subsidiaries and branches (collectively, “Klarna Group”), around the world, including in the UK.
This tax strategy applies to Klarna Bank AB UK Branch and all other Klarna presence in the UK relevant for UK tax purposes, henceforth referred to as Klarna UK. While this document is specifically for the purposes of compliance with the UK Finance Act 2016, Schedule 19 part 2 and thus may differ in form, it does not diverge in substance from the views of Klarna Group. This document shall be amended and updated, as appropriate, in subsequent annual periods.
References in this document to “UK taxation” and “UK taxes” are to the taxes and duties set out in paragraph 15(1) of the Schedule to Finance Act 2016, which include income tax, corporation tax, diverted profits tax, amounts for which Klarna Group is accountable under PAYE regulations, NIC, value added tax, customs duties, excise duties, stamp duty land tax and stamp duty reserve tax.
The responsibility of Klarna’s tax operations is primarily divided between the Board and the CFO. The Board is responsible for reviewing the UK Tax Strategy on an annual basis and for ensuring that there is a framework in place for the management and reporting of Klarna's tax affairs The CFO has the overall responsibility for the finance operations within Klarna including tax management.
Within the CFO domain at the head office, there is a group of tax professionals who are primarily responsible for making sure that Klarna follows the UK Tax Strategy. In addition, local, external advice is sought as required.
Tax risk management is governed by Klarna’s Risk Policy and the Risk Assessment and Internal Control framework. Key members of the Tax team and other participants in Klarna’s Tax Function, as well as Klarna’s compliance and risk control teams, are all involved in the related processes. The framework includes, among other things, tax related controls, yearly risk and control assessment, and control testing. In addition, Klarna has an NPA (New Products/ Processes Approval) Process to ensure that any major changes within Klarna are in line with the tax risk strategy and risk appetite of the Risk Policy.
Klarna shall also work toward permeating the entire organization with an understanding of the UK Tax Strategy in order to facilitate their achievement in a flexible and commercial manner.
Klarna’s attitude to tax planning.
Klarna shall make the best effort to comply with local requirements and disclose all relevant information according to applicable tax legislation in all jurisdictions where business is carried out. At the same time, Klarna shall consider external and internal rules on data protection and confidentiality.
Klarna will declare and pay tax in the jurisdictions where taxable profits are earned in accordance with international transfer pricing rules.
Klarna will not engage in any aggressive tax planning or ethically unacceptable tax avoidance.
Klarna shall ensure that a technical tax assessment is made and, where deemed appropriate, obtain an external opinion for all substantial transactions where a tax position must be adopted.
Klarna shall monitor the tax risk in the UK as well as in all major jurisdictions where business is carried out. This requires the identification and assessment of applicable existing and impending tax laws and regulations.
Klarna have not entered into any structures of an artificial or contrived nature. Klarna works within the OECD framework, as well as local domestic tax legislations to ensure the local and global tax footprint represents the relevant and appropriate compliance obligations in each jurisdiction.
Tax risk appetite.
Klarna’s strategy is to achieve a fair tax level, meaning that Klarna’s tax positions are aligned with the business set up, compliant with applicable tax law and in line with the values and principles of Klarna.
It also means that Klarna can defend all material positions with technical assessments that, via the letter and spirit of legislation or case law, supports the position taken. Where appropriate, Klarna shall obtain an external opinion.
Klarna will not engage in aggressive tax planning or tax avoidance. Aggressive tax planning is here defined as transactions that are carried out solely or with the principal purpose of avoiding tax and where the substance of the transaction is not in accordance with the form hereof. Tax avoidance occurs when planning frustrates the intention or spirit of the law for the purpose of reducing a person’s tax burden in a way that runs counter to the spirit or intention of the law, without being strictly illegal.
Working with HM Revenue & Customs (“HMRC”).
Klarna is committed to having an open, honest and constructive working relationship with HMRC and other tax authorities, ensuring prompt disclosure and transparency in all tax matters and avoiding unnecessary disputes. These relationships include, where appropriate, seeking pre-transaction clearance from HMRC, and making tax compliance procedures, controls and records readily available for review by HMRC upon request. All inquiries by HMRC will be handled in a courteous, timely and professional manner.
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Copyright © 2005-2023 Klarna Bank AB (publ). Klarna Bank AB (publ) is authorised and regulated by the Swedish Financial Supervisory Authority. Deemed authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website. Klarna Bank AB offers both regulated and unregulated products. Klarna’s Pay in 3 instalments and Pay in 30 days agreements are not regulated by the FCA. Klarna Bank AB (publ) registered and head office: Sveavägen 46, 111 34 Stockholm, Sweden. A Swedish public limited company (publikt bankaktiebolag) registered with the Swedish Companies Registration Office with organisation number: 556737-0431.