Our world Search PLC | Sustainability Menu Tesco's approach to tax Tesco is a responsible taxpayer. We are one of the most significant contributors of tax in the UK and recognise the importance of the tax payments that we make in all the communities we serve. In our financial year to 27 February 2021 the group paid £5.2 billion of tax; taxes borne by the Group were £1.7 billion, which includes £535 million in respect of our voluntary repayment of business rates relief, as well as taxes we collect that are generated from our operations of £3.5billion. Further information on the taxes we pay can be found here. Our Tax Principles How we approach our tax obligations is governed by our tax principles, which have been approved by the Tesco PLC Board. These principles are aligned with our values, which guide every action and every decision we take in our business, and are as follows: We pay the right amount of tax in accordance with the tax laws in all the territories in which we operate. Tax is considered in all significant business decisions, but we do not undertake any transactions or operate in any perceived tax havens for the sole purpose of realising tax savings. Intra group transactions are carried out on an arm’s length basis reflecting the economic contribution of each group company. Where we are uncertain as to how tax law applies we look to discuss this with the relevant tax authority to achieve certainty for Tesco and the tax authority concerned. We work in a collaborative, open and transparent manner with the tax authorities and seek to achieve early agreement of our tax position. We proactively engage with governments on tax policy, balancing the Group’s interest with those of the relevant Government. The principles outlined above are reviewed on an annual basis by the Board and our adherence to them is monitored by the Chief Financial Officer and the Group Tax Director. How we meet our tax obligations Governance and oversight The Board has overall responsibility and accountability for tax and adherence with our tax principles. The Group Tax Director provides the Audit Committee with regular updates on the Group’s tax obligations and all material decisions relating to tax are governed by our Delegations of Authority framework, which has been approved by our Board. The day-to-day management of our tax obligations The Group Tax Director leads an in-house team of tax professionals. We engage leading professional service providers for advice where required, given the complex and dynamic nature of tax law. Responsibility for tax is clearly defined for each of the territories in which we operate and our approach to tax in each is closely monitored to ensure that our tax principles are applied consistently across all of these territories in line with our Code of Business Conduct. This includes a zero-tolerance approach to tax evasion whether carried out by an employee, or a business partner acting for us, or on our behalf. Our in-house tax team is in regular dialogue with the wider business to ensure that our tax obligations are properly considered in business decision making. The Internal Audit team plays an important role in independently monitoring and testing our key financial controls, including those for tax, and they report on their effectiveness to the Audit Committee. In the UK, our largest market, we adhere to the Senior Accounting Officer legislation, which requires our Chief Financial Officer to confirm to HM Revenue & Customs on an annual basis whether our tax processes are appropriate. Taxing our business We adopt a low-risk approach to tax and do not engage in artificial tax arrangements. Our tax obligations, and therefore our tax contribution, are aligned with the commercial and economic activity of our operations. Tax is considered in all significant business decisions but we do not undertake any transactions for the sole purpose of realising tax savings. We focus on delivering accurate tax returns and determining the correct tax treatment across all of our business transactions, to ensure we pay the right amount of tax at the right time, in accordance with the tax laws of the territories in which we operate. Working with HM Revenue & Customs and other tax authorities Our relationship with HM Revenue & Customs and other tax authorities is open and transparent. We adopt a collaborative approach to our interactions with tax authorities. In the UK, we are in regular dialogue with HM Revenue & Customs and our Customer Compliance Manager, who is our central point of contact, as part of our work to ensure we are meeting our UK tax obligations. Where there is uncertainty on a tax matter, we look to discuss the matter with the relevant tax authority to obtain certainty for both the Group and the tax authority concerned. Engaging with governments We value the opportunity to engage with governments, either directly or through representative bodies. Where appropriate, we will share our views with government on the development of tax policy and legislation. Our approach to tax has been published in accordance with paragraph 16(2), Schedule 19 of the Finance Act 2016, and relates to our accounting period ended 26 February 2022. 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