Corporate Social Responsibility 2021 - Flipbook - Page 12
INDUSTRIENS PENSIONSFORSIKRING A/S
2021
CORPORATE SOCIAL RESPONSIBILITY REPORT
Tax
Industriens Pension works continuously to ensure
the best possible return for members of the
pension scheme.
Tax is an important parameter when investing,
especially when investments are across national
borders. In many cases, avoiding double taxation
is legitimate and consistent with the intention of
the law. However, it is crucial for Industriens
Pension that the tax structures and methods used
also ensure fair tax payments - for the companies
invested in and for Industriens Pension.
Industriens Pension disapproves of aggressive tax
planning and tax evasion, including any attempts
at, and involvement in money laundering, and
expects the same of all its cooperation partners.
Investments
Over the past years, Industriens Pension has
gradually increased its focus on fair tax payment
and tax structures in the companies in which it
invests. In 2018, Industriens Pension joined forces
with three other Danish pension companies to
draw up a tax code of conduct for private equity
investments. Since then, work has systematically
been carried out to ensure that members’ funds
are not invested in aggressive tax structures that
may be used to reduce tax payments to a level that
is not in line with responsible tax behaviour.
TAX
Even though negotiations are lengthy and difficult,
it has become easier to negotiate the terms, as the
common tax code of conduct has become more
widely known. So far, the experience is positive,
but this is still an area requiring substantial
resources, also in the future.
Work is continuously being done to spread
knowledge of the code of conduct and to gather
support for the ideas behind it. Another 13 pension
companies and large commercial foundations have
endorsed the code of conduct since it was drawn
up.
Work on the tax code of conduct continued to be a
central task in 2021, and internal procedures and
routines have been established to ensure
responsible investments in unlisted assets from a
tax perspective.
Today, Industriens Pension places stricter demands
on managers offering investments, including that
they comply with the tax principles established. If
this is not the case, Industriens Pension will not
make the investment.
So far, Industriens Pension has managed to
integrate the principles in agreements with
investment managers. This is almost always
associated with lengthy and difficult negotiations.
Negotiating terms with managers in the EU is
clearly easier than negotiating with US investment
managers. Managers in the US often argue that
they will risk lawsuits from other investors if they
fail to minimise tax payments as far as possible,
whereas Industriens Pension stresses that the
common tax code of conduct does not prevent this.
Industriens Pension’s own tax payments
For the 2021 tax year, activities at Industriens
Pension resulted in payments of taxes and duties to
the Danish state amounting to DKK 7.3 bn.
The companies adopting the code of conduct have
committed themselves to regularly checking
compliance with the code of conduct by their
investment managers. Therefore, Industriens
Pension has started making random checks on
investment
managers’
compliance
with
agreements related to ESG and tax. This requires
updated information from the funds, who are
generally willing to respond to inquiries from
Industriens Pension. The random checks show
that almost all companies have been able to
document compliance with the guidelines.
Table 3
Taxes and duties paid (DKK mill.)
2021
2020
5,075
1,459
Corporation tax
0
1
Real property tax
4
3
Tax on yields of certain pension-scheme assets
Tax according to the Taxation of Pension Schemes Act
A-tax and labour market contributions on premiums and pension benefits
A-tax and labour market contributions on employee salaries
VAT and payroll tax
Total taxes and duties
390
337
1,683
1,564
64
59
71
74
7,287
3,497
12
