We participate in philanthropic efforts around the globe, including charitable giving, employee involvement and disaster relief.
Tax Risk Management
Tax compliance and reporting risk.
This risk is managed by:
- ensuring that there are appropriately qualified and experienced employees in the tax function
- putting processes and procedures in place that mitigate risk
- using external advisors for review
Changes in tax legislation
The Group actively monitors new tax legislation and any changes of interpretation of existing legislation as part of the management of its estimated effective tax rate throughout the year. It seeks external assistance from professional advisors and clarification from H M Revenue & Customs where necessary and appropriate.
Mastercard has adopted a Code of Conduct and other internal policies and guidelines intended to support its mission statement and to comply with the laws, rules and regulations that govern its business operations. The Code applies to all directors, officers and employees of Mastercard. In addition, it has adopted a Supplemental Code of Ethics applicable only to the President and CEO, the Chief Financial Officer, the Controller, and certain other senior officers of the US Parent company, including those who serve in financial accounting, treasury, tax and legal advisory roles. Based on management reports, the Audit Committee monitors compliance with the Code, the Supplemental Code of Ethics and other internal policies and guidelines.
Mastercard’s published Code of Conduct affirms that it believes that “acting ethically and responsibly is not only the right thing to do, but also the right way to do business”. The Code of Conduct applies to Mastercard employees around the world. Abiding by the standards and procedures outlined in the Code and related policies is a condition of continued employment with the Company.
Cross-border transaction risk
Mastercard UK affiliates engage in intercompany transactions, some of them with entities outside the UK. Most locations where Mastercard affiliates operate have implemented income tax legislation explicitly requiring that intercompany transactions be conducted according to arm’s length standards and that materials be prepared (i.e. transfer pricing documentation) to demonstrate compliance in this regard.
All intercompany transactions require both economic substance and business purpose in order to be approved and implemented. Mastercard pays taxes in locations where it maintains business operations and employs people; the selection of such locations depend on several criteria, including: business climate, the strategic importance of the market, availability of a skilled workforce, and availability of office space, among other factors. Mastercard does not maintain a nominal presence in any jurisdiction simply for the purpose of taking advantage of a low statutory tax rate.
Merger & Acquisitions risk
The Merger & Acquisitions team involves the tax team from the beginning of any project. The tax team is involved in any necessary tax due diligence and the overall deal process. Furthermore, tax is a separate workstream in any integration process. No entities are disposed of or liquidated without the involvement of the tax team.