ERGO Lebensverischerungs AG UK Branch (Trading As Ellipse)

Tax Strategy for the year ending 31st December 2016


As a Munich Re Group entity, we attach great importance to responsible and sustainable company management. Corporate Governance as well as sustainable risk management direct our day-to-day actions and help determine long-term strategic decisions. In addition, Corporate Responsibility is an essential component of our Group and our strategy is built on “Company success through responsibility”. Furthermore, Munich Re’s Code of Conduct binds our management and staff to engage in ethically and legally impeccable conduct.

In terms of our attitude towards taxation, Munich Re is a fair and reliable partner to its clients, its employees, its shareholders and all other external regulatory compliance parties (including HM Revenue & Customs (“HMRC”)). We are committed to acting in a prudent and responsible manner. We are an open, transparent and dependable taxpayer.

Our approach to risk management and governance arrangements in relation to taxation

As taxation is a key element of meeting our wider business objectives, the Directors of our various UK business operations provide leadership in respect of our approach to taxation.

From an operational perspective we have processes in place for identifying and addressing current and future tax risks across the full ‘record to report’ life cycle. This involves engagement with all key internal stakeholders (Finance, HR and Tax). Where appropriate, senior level committees provide regular oversight. Due to the international corporate structure we ensure that we remain connected on a global basis and that appropriate arms length pricing is in place for cross border transactions

Our internal review system (and as appropriate, external assistance) supports the various Senior Accounting Officers in certifying to HMRC that we have appropriate tax accounting arrangements. Additionally, all tax returns and other submissions to HMRC are checked and validated internally prior to submission. Where we assess that we do not have the necessary in-house capabilities to fulfill our tax compliance requirements we appoint external advisers to help manage this tax risk.

Where appropriate, we seek to utilise tax authority approved structures to facilitate our business. We obtain advice from appropriately qualified external advisers on specialist UK and non-UK tax matters such as transfer pricing, indirect tax and employment tax matters which form part of our tax return processes and UK cash tax obligations. This supplements the skills of our own Finance team in appropriate cases. In addition, for all UK taxes we ensure adequate training is provided to help identify new and emerging risks. For all tax processes there is clear accountability, reporting and escalation lines in place with Group Tax in Germany.

We have historically been categorised by HMRC as “not low-risk” due to the complex organisational structure of the different Munich Re entities within the UK and are committed for all areas within our control to strive for a “low-risk” marking.

Tax risk appetite

As with our broader business risk appetite we have a low tolerance towards tax risk (across all taxes) and do not make use of tax planning which does not support genuine commercial activity. We seek to minimise the risk of a dispute with HMRC by being open and transparent about our tax affairs.

The tax consequences of significant transaction (including internal restructuring and changes to IT systems) are considered by the senior stakeholders (including Group Tax) as part of its deliberations on the transactions in question.