This strategy applies to the UK entities headed by Toys “R” Us, Inc. (‘Toys Inc.’) in accordance with paragraph 19 of Schedule 19 to the Finance Act 2016. A list of the U.K. legal entities to which it applies is set out below. In this strategy, references to ‘Toys UK’ or ‘the group’ are to all these entities. The strategy has been published in accordance with paragraph 16(4) of the Schedule.
This strategy applies from the date of publication until it is superseded. References to ‘UK Taxation’ are to the taxes and duties set out in paragraph 15(1) of the Schedule which include:
- All corporate income taxes
- Indirect taxes (VAT, Stamp Duty Land Tax)
- Employment taxes (income tax / National Insurance)
References to ‘tax’, ‘taxes’ or ‘taxation’ are to UK taxation and to all corresponding worldwide taxes and similar duties in respect of which Toys UK has legal responsibilities.
Toys UK is committed to full compliance with all statutory obligations and disclosure to tax authorities. Toys UK’s tax affairs are managed in a way which takes into account the group’s wider corporate reputation in line with the group’s overall high standards of governance.
Governance in relation to UK taxation and Management of Tax Risk
The Vice President, Global Tax (‘The Tax VP’), employed by Toys “R” Us-Delaware, Inc. (‘Toys US’), a subsidiary of Toys Inc., incorporated in the United States, is responsible for Toys UK’s tax affairs including audits, settlements, fines and penalties. The Tax VP heads Toys “R” Us Tax Department which is maintained by Toys US. The tax VP reports to the CFO who has oversight responsibilities to Tax matters.
The Finance Director (‘FD’) of Toys "R" Us Limited is only responsible for the payment of all taxes, concerning Toys UK’s commercial operations, including direct and indirect taxes. The entities forming these commercial operations are made clear in the list of entities below.
Toys “R” Us has a set of internal controls that are designed to reduce the level of tax risk arising from its operations as far as is reasonably practicable. Appropriate process owners are required to follow such controls to ensure the group’s compliance with tax obligations in their respective areas of taxes. The process owners also review pertinent activities and processes to identify key risks and controls in place. These key risks are monitored for business and legislative changes which may impact them and changes to processes or controls are made when required.
Competent external advisors are utilized in connection with preparation of tax returns, understanding changes in tax legislation, and analyzing the tax consequences of corporate transactions, among other areas.
Appetite for Tax Risk & Attitude toward Tax Planning
Toys UK strives to comply fully with its regulatory and other obligations and to act in a way which upholds its reputation as a responsible corporate citizen.
The level of risk which Toys UK accepts in relation to UK taxation is consistent with its overall objective of achieving certainty in the group’s tax affairs. Therefore, its tax risk appetite is low. While Tax is considered in all significant business decisions, and Toys UK seeks to take advantage of available tax incentives, reliefs and exemptions, in line with, and in the spirit of, tax legislation, Toys UK seeks to maintain a conservative viewpoint toward tax risk and has no tolerance towards transactions that lack commercial benefit.
Relationship with HMRC
Toys UK seeks to have a transparent and constructive relationship with HMRC. Toys UK holds meetings and communicates with HMRC in respect of developments in Toys UK’s business, current, future and retrospective tax risks, and interpretation of the law in relation to all relevant taxes.
When submitting tax computations and returns to HMRC, Toys UK seeks to disclose all relevant facts and identify any transactions or issues where it considers that there is potential for the tax treatment to be uncertain.
Publication date: 31 January 2018.
- Toys "R" Us Limited
- Toys "R" Us Properties Limited
- Toys "R" Us Holdings Limited
- Toys "R" Us Financial Services
- Toys "R" Us (UK) Limited
- Toys "R" Us Properties (UK) Limited
- TRU (UK) H4 Limited
- TRU (UK) Noteholder Limited
- TRU (UK) H5 Limited
Other UK entities:
- TRU (UK) Asia Limited
- TRU (France) Holdings Ltd.
- TRU (France) Finance Ltd.
- TRU Europe Limited
- TRU (UK) H7 Limited
- TRU (UK) H8 Limited
- TRU (UK) H9 Limited
- TRU (Holdings) Limited
- TRU Taj Holdings 2 Limited