8 DSV Tax Report 2023 Our approach to taxes Presence in non-cooperative tax jurisdictions Our local presence is driven by business strategy and commercial priorities, and we do not create artificial legal structures to avoid taxes or place passive income in low or nil-tax jurisdictions to move income from higher tax countries. However, to maintain end-to-end supply chains for our customers we have operational entities in countries referred to by the EU as non-cooperative tax jurisdictions. In 2023, DSV had operations in Costa Rica and Panama, which were listed by the EU as non-cooperative jurisdictions, to secure transport to and from these countries. Costa Rica was listed as a non-cooperative tax jurisdiction in February 2023 and moved to the grey list in October 2023, and Panama was included on the list throughout the year. In Costa Rica, we have 39 full-time employees performing Air & Sea transport at one location, while 182 full-time employees perform Air & Sea and Solutions activities at four locations in Panama. Our activities in these two countries result in local corporate tax shown in our country-by-country report on page 12. In addition to the non-cooperative jurisdictions mentioned above, DSV was present in the British Virgin Islands in 2023, which was listed as a non-cooperative jurisdiction from February 2023 to October 2023. The British Virgin Islands entities were inherited through our acquisitions of UTi and GIL. The entity inherited from GIL is a tax resident in the Netherlands. The entities have no activity, and we are in the process of liquidating these inherited offshore entities. Transfer pricing Our Transfer Pricing Policy is aligned with the principle of paying taxes where income is earned, and the arms-length principle is applied to intercompany trading in accordance with OECD guidelines and local applicable law. Our governance structure supports compliance with our Transfer Pricing Policy. We maintain a flat, locally empowered organisation, firmly anchored in local markets and working closely with customers. We strongly believe in local ownership and decisions based on sound business judgement and supported by solid data. DSV’s policy framework sets out procedures for our entities to prepare transfer pricing documentation and country-by-country reporting when required by law. The process is controlled by Group Tax, ensuring that the appropriate transfer pricing resources are involved in creating compliant documentation while accommodating local requirements. Relationship with external stakeholders DSV maintains an open and transparent dialogue and a good working relationship with tax authorities, local society and other relevant stake- holders to address and minimise potential disputes and double taxation. Formal cooperative compliance programmes with tax authorities are available in different forms around the world, and the formalities and exp ectations to participate in these programmes are evolving. As part of our dialogue with tax authorities, we continuously assess the most relevant framework for the cooperation, including formalised cooperative com pliance programmes to secure an aligned and compliant process upfront. DSV has a seat in the Tax Committee of the Danish Chamber of Commerce and has in 2023 provided input on the double tax treaty between Denmark and France, among other matters. Currently, we are in dialogue with the Danish tax authorities to agree on the future formal structure of our cooperative relationship and participate in dialogues with governments in the countries in which we operate. By engaging in these dialogues, we wish to support the development of improved tax systems. For more information on our engagement with external stakeholders, please refer to our Sustainability Report at: https://www.dsv.com/en/sustainability-reports. What is the EU list of non- cooperative tax jurisdictions? Since 2017, the EU has been keeping a list of jurisdictions that are labelled as non-cooperative (EU blacklist). The list aims to encourage countries to cooperate in establishing better practices in tax legislation to combat tax fraud, evasion and avoidance. A separate list is referred to as the grey list for jurisdictions that have committed to reforms. If jurisdictions on the grey list do not show satisfying progress on previous commit- ments, they are moved to the list of non-cooperative jurisdictions. What is transfer pricing? Transfer pricing typically refers to the rules and methods for pricing transactions within and between enterprises under common ownership or control. The transfer pricing measures are one of the tools that the OECD uses to prevent international companies from shifting profits from higher tax jurisdictions to lower tax jurisdictions. The arm’s length principle imposes rules on the pricing of transactions within a group of companies so that the transactions do not differ from those made between independent parties.
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