Information on the implemented tax strategy for the fiscal year 2022

SAGINOMIYA EUROPE Sp. z o.o. (the ‘Company’), in fulfilment of its obligations under Article 27c of the Act of 15 February 1992 on Corporate Income Tax (Journal of Laws of 2022, item 2587, as amended), adopted a written version of the implemented tax strategy. The document was adopted by a resolution of the Company's Management Board and is generally available to all employees and associates involved in the tax settlement processes.

In line with the implemented tax strategy, the Company applies a range of processes and procedures related to the management of duties arising from tax law provisions and ensuring their proper execution, particularly regarding:

the preparation of tax returns, including rules for controlling the correctness of their submission to the relevant authorities and the timely payment of tax dues,
issuing sales invoices, indicating the principles of proper verification of contractors,
making purchases of commercial and other goods and services, processing payments and settling purchase documents,
settling personal income tax, including the proper preparation of tax declarations and timely tax payments,
the procedure for the inventory of stock and the approval of its results,
resolving any tax doubts, primarily regarding the admissibility of recognizing tax costs and deducting input VAT,
the principles of cooperation with external tax advisors on projects related to tax issues,
the implementation of obligations in the area of transfer pricing, including the preparation of the relevant documentation and the submission of the required declarations,
the implementation of obligations related to countering non-compliance with the duty to report information on tax schemes (MDR),
the implementation of withholding tax obligations, including in particular verification that the conditions for applying a reduced rate or exemption from withholding tax are fulfilled,
constant monitoring of tax law amendments and the implementation of new statutory obligations,
participation in tax proceedings, including the rules of cooperation with the tax authority in the event of a preliminary examination or tax control,
reporting of infringements relating to tax and legal matters and the procedures in case of confirmed violation,
archiving of documents, particularly those significant from the perspective of tax settlements.

The processes and procedures applied by the Company consider the specific nature of the Company's operations and ensure reliable and timely compliance with tax obligations, as well as minimize the risk of tax-related irregularities. Within the framework of the indicated processes and procedures, the Company has additionally defined the scope of responsibility of individual employees for the proper performance of duties related to tax settlements.

The Company fulfils its tax obligations in the territory of the Republic of Poland, in particular by timely filing of relevant tax declarations, payment of tax dues, payment of all other public and legal dues, keeping relevant documentation related to tax settlements and archiving it for the required period of time, as well as fulfilling obligations related to transfer pricing documentation.

In 2022, the Company was a taxpayer for:

corporate income tax,
value-added tax.

In 2022, the Company was a tax remitter for personal income tax.

In 2022, the Company did not use voluntary forms of cooperation with the National Tax Administration authorities.

In 2022, the Company conducted the following transactions with related entities (including those that are not tax residents of the Republic of Poland), whose value exceeded 5% of the balance sheet total of assets, determined based on the last approved financial statement of the Company:

1. Saginomiya Seisakusho, INC:

purchase of goods - PLN 205,820,629.04,
purchase of secondment services - PLN 748,695.66,
purchase of maintenance services for testing machines - PLN 573,540.60,
purchase of other services - PLN 451.12,

2. Danfoss Saginomiya Sp. z o.o.:

purchase of goods - PLN 25,303,720.33.

In 2022, the Company did not settle taxes in territories or countries with harmful tax competition.

In 2022, the Company did not apply for a general tax interpretation, an individual tax interpretation, binding tariff information or binding excise information.

In 2022, the Company did not submit to the Head of the National Revenue Administration any information about tax schemes as defined in Article 86a § 1 point 10 of the Tax Ordinance Act of 29 August 1997 (Journal of Laws 2023, item 2383, as amended). At the same time, the Company performs obligations related to counteracting the failure to comply with the obligation to provide information on tax schemes (MDR), by performing ongoing verification of events occurring in the Company that could potentially result in the obligation to report a tax scheme.

In 2022, the Company did not undertake or plan any restructuring activities that could affect its tax liabilities or the tax liabilities of related entities.