Overview

Overview

This document sets out the UK Group’s policy and approach to conducting its dealing with tax risk.

The UK Group is headed by John Deere Limited ("John Deere") and comprises the following legal entities:

  • John Deere Limited
  • The Vapormatic Company Limited
  • Vapormatic U.K. Limited
  • Vapormatic Europe Limited
  • John Deere Forestry Limited
  • John Deere Bank SA

The ultimate parent company of the UK Group is Deere & Company, a US listed company. The UK Group adheres to the Core Values put in place by the founder, John Deere. Those Core Values are Integrity, Quality, Commitment and Innovation. These values are the true essence of how the group works and are in every product, service and opportunity offered to its customers, suppliers, employees and investors.

Tax risk management

Tax risk management

John Deere is committed to conduct its tax affairs in line with the following:

  • To comply with all relevant laws, rules and regulations, and reporting and disclosure requirements
  • To ensure that the tax strategy of the UK Group is aligned with the strategy of the overall group in its approach to risk
  • To take account of the Core Values of the overall group
  • Build and maintain constructive relationships with HM Revenue and Customs

How the group manages and mitigates their business’s tax risks

The UK Group is committed to ensuring that all laws, rules and regulations are adhered to. The UK Group uses professional advisers to help ascertain tax risks whenever it considers that such advice is necessary.

High level description of key roles and the corresponding responsibilities

Day to day tax matters are the responsibility of the Financial Controllers of the respective UK companies.

The UK Directors are fully involved in all decisions in relation to any areas of actual and potential tax risk.

Systems and controls in place to mitigate tax risk

As the parent company is a US listed company, the whole group (including the UK companies) are subject to the Sarbanes-Oxley Act. This Act was introduced by the US Government to improve corporate governance and accountability. Tax risk is mitigated by the UK Group through the implementation of Sarbanes-Oxley, as detailed in the following activities:

  • Internal audit plays a significant role in monitoring tax risk.
  • Scheduled calls between local operations and the Deere US Tax
  • Department to review issues and developments
  • Quarterly tax accounting internal control questionnaires are completed at a local level and reviewed at US level
  • Quarterly tax calls with professional advisers prior to quarter close to review issues and significant events
  • Quarterly Tax Director Certification is made to Vice President (Tax)
  • Annually, a reconciliation of all closing to return tax adjustments are prepared and reviewed

Level of oversight of the board

Quarterly reporting of tax figures to the US ensures that any tax issues are brought to the attention of the US Treasury and Finance function.

Tax planning: Our approach

Tax planning: Our approach

The UK group does not use artificial tax avoidance schemes or tax havens to reduce the group’s tax liabilities.

The UK Group does not interpret tax law in a way which may be against the spirit of that law.
The UK Group uses professional advisers to assist it in determining the spirit of the law.

The UK Group’s aim is to pay the correct amount of tax to the UK tax authority.

Tax risks

Tax risks

In reviewing the tax risks of any proposed action or decision, the Core Values are taken into consideration in conjunction with the following:

  • Maintaining the reputation of the UK Group and larger worldwide group
  • The legal and fiduciary duties of directors and employees
  • The consequences of potential disagreement with HM Revenue and Customs

Relationship with HM Revenue & Customs

Working with HM Revenue & Customs

The UK Group works closely with its Customer Relationship Manager in relation to current, future and past tax issues.

Clearance from HM Revenue and Customs is sought for any significant business transactions which are not in the nature of normal trading.