Vaisala is a global leader in industrial, weather, and environmental measurements. Vaisala group (“the group) has sales to more than 150 countries and subsidiaries in nearly 20 countries. Given the global nature of its operations, a wide range of different tax regulations are applied to Vaisala’s activities worldwide.
Vaisala aims to govern its tax matters in a sustainable manner. Vaisala’s approach to tax is aligned with our overall business strategy, values and Vaisala’s Code of Conduct. Vaisala strives to be a good corporate citizen, with high commitment to technology leadership and sustainable development.
We are committed to comply with the tax legislation in the countries where we operate and aim to pay the right amount of tax at the right time in the countries where we create value. We strive to structure our business in an efficient manner to ensure that our business can grow and meet strategic business targets. We aim to keep our tax costs at a stable and predictable level to protect growth and shareholder return. As we operate in many jurisdictions, we need to ensure that we are not subject to double taxation, so that we pay tax only once on the profits made.
The aim of this document is to set out the general principles for tax management in Vaisala. These principles are applicable to all entities in the group. These principles have been approved by the Board of Directors of Vaisala Oyj on 14 December 2023.
Vaisala’s tax function (Group Tax Team) is part of Vaisala’s centralized Finance & Control function. The group’s CFO has the overall oversight of tax matters in the group.
The Group Tax Team, a team of skilled tax professionals, is responsible for implementing and monitoring the tax policies to ensure that all Vaisala group entities comply with them in a consistent way. The tax specialists in the Group Tax team are responsible for securing efficient management of Vaisala’s tax obligations. The Group Tax Team monitors the group’s tax position and maintains a responsibility assignment matrix (RACI) for tax related tasks and processes in the group.
Vaisala has engaged service providers to provide support and ensure compliance with local rules and regulations in foreign recurring tax compliance work, where needed. Vaisala’s Finance & Control monitors the transparency, quality and outputs from these engagements.
Important matters of principle, including the group’s transfer pricing model, are presented to and approved by the Audit Committee. Material tax topics are presented at least annually to the Audit Committee.
We have processes in place to ensure early involvement of Group Tax Team in critical business cases and transactions. This is important, as we recognize that tax impacts should be considered in decision making. In significant projects, the Group Tax Team collaborates closely with Business Areas and other internal stakeholders.
We are committed to comply with applicable tax laws and rules and regulations. We recognize that tax regulations are increasingly complex and aim to ensure that our interpretations are compliant. We have a compliance process in place to ensure that we pay the right amount of tax at the right time and file tax returns on time.
Vaisala’s transfer pricing model is aligned with the arm’s length principle in accordance with OECD Transfer pricing guidelines. The rationale of the chosen transfer pricing methods is properly documented and aligned with the substance of the economic activity. The arm’s length principle applies to all intra-group transactions. Vaisala has procedures in place to monitor the correct application of the transfer pricing model.
We regularly identify, assess, and monitor tax risks. Group Tax Team cooperates with Business Areas and other internal stakeholders to identify risks and takes actions to mitigate material risks. We aim for clear and justified tax positions and apply the more likely than not principle in our assessment. Where tax law is unclear, we may seek advice from external advisors to clarify the tax consequences of our business transactions.
Our group structure is driven by business needs and we have subsidiaries only in countries where we do business. We do not have group companies in tax havens and do not use artificial structures to lower the group’s tax burden.
We only engage in transactions which are driven by commercial considerations and do not seek abusive tax results.
We can take advantage of tax incentives when they are aligned with our business. We seek to implement them in the manner intended by the relevant statutory framework.
We maintain a professional and constructive relationship with the tax authorities in the jurisdictions, in which we operate. Responses to tax authorities are given accurately and in a timely manner. As certainty on tax matters is important for us, we seek rulings from tax authorities to confirm an applicable tax treatment, where needed.
Vaisala publishes annually its tax footprint. We report information on corporate income taxes, value added taxes, payroll taxes, excise taxes and property taxes. We apply the principle of materiality when presenting the figures.