2023 Realty Income United Kingdom of Great Britain and Northern Ireland (‘UK’) Tax Policy
This tax policy applies to the UK affiliates of Realty Income Corporation to comply with their duties under paragraphs 19 (2) and 22 (2), Schedule 19 Finance Act 2016 in publication of a UK tax strategy.
These UK affiliates of Realty Income Corporation, include entities who are UK incorporated companies and entities who are non-UK incorporated companies but have permanent establishments in the UK, who are treated by the tax authority (HMRC) for UK tax strategy disclosure purposes as if they were UK companies. These UK affiliates are obliged to meet tax strategy requirements where aggregate turnover exceeds 200m GBP or balance sheet totals exceed 2bn GBP, or if they are part of a Multi-National Enterprise (MNE) group meeting Organisation for Economic Co-operation and Development’s (OECD’s) ‘Country-by-Country Reporting’ framework threshold of global turnover in excess of 750 million Euros. As both apply, it is the responsibility of the head of the UK sub-group to publish a UK tax strategy that covers all related UK affiliates.
1. OUR APPROACH TO RISK MANAGEMENT
The UK tax strategy conforms with the Realty Income Corporation’s Code of Business Ethics and its Corporate Governance Commitment. It is overseen by the Realty Income Corporation Board of Directors and Audit Committee, with day-to-day implementation of the tax strategy delegated to a qualified and experienced EMEA finance team who are supported by global tax and controlling teams.
This finance team includes our UK tax team who monitor and update our internal tax processes and procedures to mitigate tax risk. They are further supplemented by the appropriate external resource of professional advisers, who provide them with specific and specialist tax advice and support where needed to ensure compliance.
2. TAX PLANNING (AS RELATES TO UK AFFILIATES)
We are committed to compliance with all tax laws, regulations and practices in the UK, including the OECD’s internationally applicable arm’s length principle in relation to transfer pricing. We seek to identify, evaluate, monitor and manage tax risks to ensure compliance with our legal obligations.
We make use of government tax reliefs, incentives and exemptions that are intended to apply to our business activities, having taken appropriate specialist professional advice where necessary.
We are committed to the correct application of tax legislation to our business operation. We do recognize however that tax legislation can be complex and on occasion open to interpretation which may give rise to tax risks. In the event that the application of tax law to a material transaction or to a given situation was unclear or uncertain, or alternatively where specialist knowledge was required, we would always take professional advice to receive assurance in reducing any such potential tax risk as far as possible.
We would not undertake tax planning that we might consider could adversely affect our relationship with HMRC nor damage our reputation with our group’s wider global stakeholder community. As it is key to us that any position adopted should not compromise our REIT status with HMRC we have a very low tolerance for tax risk and uncertainty, as it is our objective to be classified as ‘Low Risk’ by HMRC.
3. OUR RELATIONSHIPS WITH HMRC
We always look to engage fully with HMRC in an open, pro-active and co-operative manner, with a key objective of our UK tax team to ensure that we have and maintain a constructive relationship with them. As part of this relationship, we therefore regularly communicate with HMRC to discuss and explain our business to them with full disclosure. In the event that any tax issues or any differences might arise with HMRC we would always seek to resolve such issues collaboratively in an open and transparent dialogue to ensure compliance.