UK Sub-Group Tax Strategy
Updated on: 28 February 2022
Capcom Group (the ‘Group’, consisting of Capcom Co., Ltd., a company incorporated in Japan, and its subsidiaries) is an international videogame developer and publisher whose portfolio of intellectual property includes: Resident Evil™, Street Fighter™ and Monster Hunter™.
CE Europe Limited (‘CEE’) is a London-based, wholly owned subsidiary of Capcom Co., Ltd. CEE owns subsidiaries in Germany and France, heading the UK sub-group of the Group (the ‘UK Sub-Group’). CEE is the only UK company in the UK Sub-Group. The UK Sub-Group publish, distribute and license CAPCOM® branded entertainment content in Europe and other PAL territories.
This document, approved by the Board of Directors of CEE, sets out the UK Sub-Group’s approach to conducting its UK tax affairs and dealing with UK tax risks and satisfies the disclosure requirements under paragraph 19(2) Schedule 19 Finance Act 2016. This tax strategy statement is relevant for the financial year ending 31 March 2022.
2. Tax risk management
The UK Sub-Group ensures that it is compliant with all relevant tax laws, rules, regulations and reporting and disclosure requirements, wherever we operate.
The UK Sub-Group reports in CEE’s Board of Directors meeting when there are current tax issues as well as the status of tax return and audit.
Tax risks are also assessed on a case by case basis, allowing the UK Sub-Group to arrive at well-reasoned conclusions on how each individual risk should be managed. Where there is uncertainty in how the relevant tax law should be applied, external advice may be sought to support the UK Sub-Group’s decision-making process.
The UK Sub-Group monitors any new tax legislation come into force and adapts them in a timely manner after obtaining the approval from the Board of Directors of CEE.
Where available IT functionality is utilised to manage transactional taxes such as VAT and this is reviewed and tested on a regular basis.
External tax advisors are engaged to support the management of corporation tax, including the submission of returns.
3. Tax Planning
The UK Sub-Group does not engage in any aggressive tax avoidance arrangement, by exploiting gaps and mismatches in tax rules to artificially shift profits to low or non-tax locations which are tightly monitored by the headquarter of the Group in Japan. The UK Sub-Group maintains the Transfer Pricing Study documents every year in relation to all the associated companies to comply with OECD guideline with the benchmarking analysis. CEE also has an Advance Pricing Agreement in place to ensure our Inter Company transactions are made at arm’s length and adjust the reasonable amounts of tax to be paid.
4. Risk Appetite
The UK Sub-Group has a low risk appetite for tax. The UK Sub-Group assesses the tax risk involved and make appropriate decisions. Where uncertainty and/or complexity arises, the UK Sub-Group seeks appropriate professional advice.
5. Working with HMRC
The UK Sub-Group has a good record of compliance and timely submission of tax returns and payments. The UK Sub-Group is willing to accommodate any requests made by HMRC.
The UK Sub-Group has an open and transparent relationship with HMRC. Where the UK Sub-Group finds difficulties about the interpretation of any tax legislation it will approach HMRC to gain proper opinion/advice in order to deal with the tax affairs properly.