Tax Strategy
A transparent tax strategy is crucial for a company's sustainable growth.
At SK On, we strive to gain the trust of various stakeholders by formulating and managing a transparent tax strategy.
Tax Strategy
At SK On, we prioritize diligently fulfilling our tax obligations and managing tax-related risks. We view these actions as the foundation of our continued business stability and growth, the value we create for our stakeholders, our central role in social and economic advancement, and our contribution to human well-being.
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01We are committed to strictly adhering to the tax laws of South Korea and every country where we conduct our operations. We cultivate transparent relationships with tax authorities in each country and earnestly comply with taxpayers' responsibilities, including providing documents as required by the relevant legislation.
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02We assess and control all tax risks that could emerge during business activities, such as enhancing our existing business competitiveness, restructuring our business configuration, and making investments for global growth. We base our final decisions on advice from domestic and foreign tax experts and legislative and enforcement authorities, as required.
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03In our dealings with related parties, we abide by the principle of using arm's-length pricing, which aligns with the OECD Transfer Pricing Guidelines and the legislations of each country. We team up with external tax specialists to draft transfer pricing reports for transactions with overseas related parties and oversee compliance status.
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04Our tax department staff diligently fulfill their tax reporting and payment obligations by the relevant laws, maintaining a transparent relationship with tax authorities.
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05We refrain from engaging in transactions or contracts that shift income between countries by exploiting disparities or loopholes in international tax systems or legislation. We strive to ensure that taxable income aligns consistently with the value generated in each country we operate.
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06We do not employ tax havens to unjustifiably lighten our tax burden by exploiting differences, loopholes, exemptions, or flaws in tax laws or treaties. We conscientiously meet our tax obligations in international transactions by adhering to a standard tax structure.
Taxation Governance & Risk
Undertaking BEPS risk assessment and documentation for Global Tax Risk Management.
Nations worldwide are revising and enacting tax laws to mandate the compilation and submission of country-by-country reports, as recommended by the OECD. This is an effort to curb international tax evasion via Base Erosion and Profit Shifting (BEPS). They are also intensifying taxation measures against tax evasion to bolster tax revenue in light of increasing public expenditures.
To comply with these regulations, we have engaged external professionals to perform a BEPS risk assessment and compile documentation across our global locations.
Progressing with APA agreements with tax authorities in each country to manage transfer pricing risk.
We recognize the potential risk of double taxation due to tax jurisdiction disputes related to transfer pricing transactions with our critical global business sites. To address this, we are employing bilateral tax treaties and the Advance Pricing Agreement (APA) system.
We have initiated the renewal of the Korea-China APA, agreed upon in 2013 for our subsidiary in China, and are in the process of applying for this renewal. Additionally, we plan to file for an APA concerning our Spanish operations with the Spanish tax authorities.
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