Intel Corporation (UK) Limited – Tax Strategy

Approach to Risk Management and Governance Arrangements in Relation to UK Taxation

Intel Corporation (UK) Limited (“Intel”) is an indirectly owned 100% subsidiary of Intel Corporation a US company headquartered in Santa Clara, CA. The VP of the Global Tax function is based in Santa Clara and is ultimately responsible for the Group’s overall tax strategy and policies. Day-to-day tax matters as they relate to Intel are assigned to the EMEA Tax Director (based in the UK) and a team of in house tax and accounting professionals who hold a combination of accounting and tax qualifications. This team monitors key UK tax risks throughout the year taking into account changes in business and tax legislation. It does this through proactive engagement (e.g. Tax Business Review meetings, Financial Statement reviews etc) and partnering with internal stakeholders (e.g Supply Chain, Finance, Business Operations, Legal, and Treasury), external tax consultancy firms and with HMRC itself. Intel’s Board of Director’s are kept appraised, understand and ultimately sign off (Corporate Action Requests, Board Meetings) on any material business decisions and their tax impact. Intel maintains suitable systems (SAP, Onesource*) and processes to ensure the overall control framework is robust - this involves, but is not limited to, account reconciliations, self-review, and the use of Intel’s worldwide Internal Audit function.

Attitude Towards Tax Planning (So Far as Affecting UK Taxation)

Intel’s tax policy is consistent with the Intel Corporation’s Tax Policy – namely “to comply with the laws, regulations and filing requirements of all jurisdictions in which Intel conducts business. We regularly engage in discussions and negotiations with tax authorities regarding taxation matters in various jurisdictions”.

There will, however, be circumstances where the amount of tax to pay may not be clearly defined, or where alternative approaches may result in differing tax outcomes. In which case Intel will use its best judgement in determining the appropriate course of action, using available reliefs and incentives where possible.

Intel aims for certainty on the tax positions that it adopts, however, tax law can be unclear at times or subject to interpretation. Intel does not look to enter into transactions that have a main purpose of gaining a tax advantage nor to make interpretations of tax law that are opposed to its original spirit. Occasionally to support us in ensuring that we have interpreted tax law and its spirit correctly, we seek advice from large accounting firms, legal firms and/or tax counsel as appropriate.

Intel does not use artificial tax avoidance schemes or use tax havens to reduce its UK tax liability. Intel applies OECD guidelines, UK and other national legislation to our intercompany transactions.

Attitude Towards Tax Restructuring (So Far as Affecting UK Taxation)

As a responsible tax payer, Intel does not engage in any aggressive tax restructuring, tax avoidance schemes or offshore tax structures to artificially reduce the amount of UK tax it pays.

Intel accesses government sponsored tax incentives where appropriate and in line with substantive business activities e.g. R&D tax credits.

Level of Risk in Relation to UK Taxation That It Is Prepared to Accept

In reviewing the risks of a tax action or decision the following are all considered:

  • The legal and fiduciary duties of directors and employees;
  • The maintenance of corporate reputation;
  • The tax benefits and impact on the Group’s reported result comparative to the potential financial costs involved, including the risk of penalties and interest;
  • The wider consequences of potential disagreement with tax authorities, and any possible impact on relationships with them.

Approach Towards Its Dealings with HMRC

Intel adopts an open and collaborative professional relationships at all times with HMRC. It engages in full, open and early dialogue with HMRC to discuss tax planning, strategy, risks, and significant transactions. It makes fair, accurate and timely disclosures in correspondence and returns, and responds to queries and information requests in a timely fashion. It seeks to resolve issues with HMRC in real time and before returns are filed if possible, and where disagreements arises, work with HMRC to resolve issues by agreement. It reasonably believes that transactions are structured to give a tax result which is not inconsistent with the economic consequences (unless specific legislation anticipates that result), nor contrary to the intentions of Parliament.