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TAX STRATEGY

1.    GROUP LEVEL CONTEXT
Eurostar International Limited (“Eurostar”) is a subsidiary of SNCF, France’s national state-owned railway company.

As a multinational company operating worldwide, SNCF acknowledges the key role of taxes in the budget and development of the countries of location of its business activities. SNCF supports the OECD’s Base Erosion and Profit Shifting (“BEPS”) initiative and is convinced that increased tax transparency will ultimately contribute to reducing unfair tax competition, and hence benefit SNCF’s business.

The SNCF group applies the following guiding principles:
-    SNCF subsidiaries act as responsible global corporate tax citizens in compliance with applicable tax laws and regulations;
-    SNCF encourages ethical and transparent business practices;
-    SNCF encourages an open and honest dialogue between tax policy makers and business;
-    SNCF has a tax team with extensive knowledge of the international tax framework with the objective of respecting its recommendations;
-    SNCF supports the BEPS initiative and respects the OECD guidelines;
-    SNCF is committed to provide transparent and accessible information to tax administrations in order to facilitate their understanding of our tax strategy;
-    SNCF has implemented country-by-country reporting as is required under the OECD recommendations and French Tax Law.

The full SNCF Group tax strategy is available at https://www.sncf.com/sncv1/ressources/reports/tax_policy_sncf_final.pdf   

2.    TAX STRATEGY
This strategy is applicable to Eurostar International Limited and its wholly owned subsidiaries and branches in the UK and Europe (“Eurostar”).
This strategy will be published in accordance with paragraphs 19 and 25 of Schedule 19 to the Finance Act 2016 and will be published and made freely available on the internet by 31st December 2018.

3.    SUMMARY
Eurostar’s aim is to be regarded as a responsible, low risk tax payer in all the jurisdictions in which it operates, whilst managing overall taxes paid by arranging its tax affairs in a manner which ensures tax efficiency.

3.1    Objectives
The tax strategy aims to ensure the following principles are applied at all times:
•    Pay the right amount of tax at the right time,
•    Act prudently and manage tax risk in line with Eurostar’s strategic objectives,
•    Comply with current tax legislation and case law in all operating jurisdictions,
•    Ensure that all relevant staff have sufficient knowledge of taxation to recognise tax issues     and act appropriately,
•    Develop systems to improve the efficiency of tax compliance,
•    Develop a good working relationship with HMRC and overseas tax authorities and where 
    possible, work with them in real time to highlight and resolve all issues which may significantly
    impact on tax.

4.    EUROSTAR’S TAX RISKS
Eurostar’s tax risks fall into four categories:

4.1    Regulatory risk:  The risk that new or changing tax legislation could impact on Eurostar’s tax position.  
We actively monitor changes in tax legislation and receive regular tailored updates from our advisors.  We will participate in consultations over proposed legislative changes where we believe the impact on our business to be potentially significant.

4.2    Operational risk:  The risk that changes or developments in our business present new or unknown tax interpretations.
Internal controls are in place over new projects to ensure tax risks are identified at an early stage in development.  This enables us to gain an understanding and obtain appropriate advice where necessary in a timely manner, which enables us to implement appropriate arrangements to minimise risks in this area.

4.3    Reputational risk:  The risk that the perception of Eurostar is impacted as a result of our actions in respect of tax.
Our aim is to maintain our low risk status by following our tax strategy to ensure our reputation is not damaged.

4.4    Compliance risk:  The risk that we fail to meet our compliance and reporting obligations in our relevant jurisdictions.
By employing appropriately qualified staff, and making use of advisors where necessary, we aim to minimise the risk of failing to meet our obligations.

5.    HOW EUROSTAR MANAGES ITS TAX RISKS
Eurostar seeks to identify those areas where we believe there may be tax risks and acts to manage those risks accordingly.  Risks are maintained on a risk register which is regularly reviewed for completeness and changes in risk levels.  The top risks are included on the Top Risk Register which is reviewed by both the Audit Committee and Board of Directors.  

Eurostar maintains reasonable and practicable procedures, processes, systems and controls to ensure compliance with relevant legislation, including the Criminal Finances Act 2017, and case law in all jurisdictions.  These procedures are tested and reviewed on a regular basis to ensure they are current, appropriate and take into account any recent changes in legislation and / or case law.  This helps to ensure we comply with our responsibilities under the Senior Accounting Officer provisions in the UK.
 
Eurostar employs appropriately qualified staff in those areas of Finance that have responsibility for aspects of taxation such as payroll, accounts payable and receivable and the preparation of tax returns.  Training is made available to staff that are required to deal with front line tax issues e.g. determining the eligibility for certain tax exemptions or the liability of a supply for VAT, and written guidance is made available.

Eurostar keeps in touch with other institutions and organisations to share best practice and keeps up to date with current tax and accounting developments that impact on our sector.  
Eurostar will develop its systems to improve the efficiency of complying with tax legislation and, in particular, in identifying and classifying transactions which impact on tax including VAT / TVA, Corporate Taxes and Employee Tax.

Where systems are being replaced or upgraded, we will consider whether there are any issues of taxation that could be improved upon.

6.    EUROSTAR’S ATTITUDE TO TAX PLANNING
In line with Eurostar’s “low-risk” tax status in the UK, we do not engage in artificial transactions the sole purpose of which is to reduce taxes.  

We will seek to arrange our affairs in the most tax efficient manner, within the legal framework of both statute and case law, and providing the underlying commercial objectives support the position, in order to ensure that we pay the right amount of tax at the right time.

We do not seek to carry out any tax planning that might impact on our reputation, brand, corporate or social responsibilities, or working relationship with HMRC or overseas tax authorities.
If we believe we have been unfairly treated by a tax authority, we will pursue our claims subject to appropriate advice, through the appeals process and the Courts where relevant. 

7.    WORKING WITH HMRC
Eurostar aims to maintain a good working relationship with the tax authorities in all the jurisdictions in which it operates.  We aim to be professional, courteous and transparent in our dealings with HMRC and other tax authorities.

Eurostar holds a “low risk” tax status in the UK, as determined by HMRC’s Business Risk Review process.

We will make real time disclosures of any relevant changes in the activities of Eurostar or other significant matters that may impact its tax position and we will respond openly and honestly to any enquiries the tax authorities make.  Where we disagree with an opinion or ruling of the tax authorities, we will make this clear together with our reasons, and where necessary, follow the appeals procedures.

Eurostar International Limited
December 2018