Paysafe is a FCA regulated, online payments business, and, until 20th December 2017, was listed on the London Stock Exchange (FTSE 250). As such, the Group has taken a responsible and transparent approach to the management and control of its tax affairs and related tax risks, by adopting the following tax strategy. This strategy was first approved by the Board on 25th November 2015 and is regularly reviewed by the Audit Committee and Board of Directors.
From 20th December 2017, the Group has been privately owned, but it continues to adopt the same level of responsible risk management and governance framework for tax that befits a UK listed group.
The group operates from offices in over 10 countries, is regulated by the relevant financial services authority in 7 countries and, operating online, services merchants and consumers in over 200 countries. Our tax strategy reflects these facets and evolves to maintain pace with the changing tax environment in which the OECD and governments internationally, including the UK, are working to build an international tax framework that equitably taxes the e-commerce world.
This tax strategy is publicly available on Paysafe’s website and is compliant with the UK tax strategy publication requirement set out in Part 2 of Schedule 19 FA 2016.
Approach of the Group to risk management and governance arrangements, including in relation to UK taxation
Our tax policy and the management of tax risks are assessed as part of the Group’s formal governance processes and are reviewed by the Chief Financial Officer who reports them to the Audit Committee on a regular basis. Day-to-day responsibility for tax sits with the Head of Tax.
Key risks are dealt with through our risk management framework, ensuring that appropriate taxes are paid promptly in each jurisdiction in which we operate and that we safeguard our reputation as a responsible taxpayer.
The risks faced by the Group fall in to three categories:
Tax compliance and reporting risks
These are the risks associated with compliance failures such as submission of late or inaccurate returns, late payment of tax, the failure to submit claims and elections on time or where systems and processes are not sufficiently robust to support tax compliance and reporting requirements. Where possible Paysafe has implemented governance risk tools to mitigate these risks, such as a global compliance workflow tool that gives the Head of Tax oversight of the status of all corporate income tax returns and tax payments.
These are the risks associated with undertaking transactions without appropriate consideration of the potential tax consequences or where advice taken is not correctly implemented. Paysafe seeks to mitigate this risk through constant engagement with the Group’s Executive and Senior Management team to understand the Group’s commercial strategy, M&A activity, new products, new geographies, and other transactions before they occur, and seeking appropriate professional advice on the tax consequences.
This is the non-financial risk that tax may have an impact on the Group’s relationships with shareholders, clients, tax authorities and the general public.
The Group aims to manage tax risk in a similar way to any area of operational risk. The primary oversight functions are Group Tax and Group Internal Audit
In 2016 the Group invested in the tax function, bringing in three additional experienced senior managers specialising in transfer pricing, indirect taxes and compliance. The current team of five tax specialists will be further expanded in 2018 to include a US State and Local tax specialist, reflecting the size and complexity of Paysafe in the USA following the acquisition of MCPS.
In 2017 the Group tax function was subject to a detailed internal audit of its risk and governance processes and was found to be satisfactory (the highest rating available).
Where appropriate, the Group seeks to engage with tax authorities to disclose and resolve issues, risks and uncertain tax positions. The subjective nature of global tax legislation means that it is often not possible to mitigate all known tax risks and therefore, at any given time, the Group may be exposed to financial and reputational risks arising from its tax affairs
Attitude of the Group to Tax Planning (so far as it affects UK taxation)
The Group endeavours to structure its affairs in a tax efficient manner where there is strong commercial merit, ensuring compliance with applicable laws and regulations and in a manner which does not adversely impact our reputation as a responsible taxpayer.
The Group will seek professional advice on any potential tax planning opportunities, including structural changes, in order to maximise shareholder value.
All significant tax planning opportunities are to be assessed and approved by the Audit Committee before the Group can implement them. The Group will also seek advance clearance of key transactions and significant structural changes from the relevant local tax authority as appropriate.
Level of risk in relation to UK taxation that the Group is prepared to accept
The Group’s tax risk appetite requires that, where tax law is unclear or subject to interpretation, its adopted tax position is at least more likely than not to be allowable under applicable tax laws.
Approach towards dealings with HMRC
The Group is committed to having an open, honest and positive working relationship with tax authorities, ensuring prompt disclosure and transparency in all tax matters. The Group has positive and constructive working relationships with H.M. Revenue & Customs, the Internal Revenue Service, the Canadian Revenue Authority and the Austrian tax authority. These relationships involve regular meetings to discuss issues and include obtaining advance clearance of key transactions where the tax treatment is uncertain. We strive to resolve any areas of dispute with the tax authorities, adopting a real time working approach, and improving mutual trust.
At both Group and local subsidiary level there is a strong level of engagement with local professional tax advisors and the Group will take appropriate advice from reputable professional firms to perform the following:
- Assist with legitimate tax planning opportunities;
- Review any material transactions; and
- Review and approve all corporation tax submissions.