Haitong International UK Tax Strategy

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Introduction

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Haitong International Securities Group Limited (‘HTI’ or ‘the Group’) is a Hong Kong headquartered, international financial institution with a rapidly expanding network of offices across the globe. Our aim is to serve as a bridge linking the Chinese and overseas capital markets.

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HTI serves around 200,000 corporate, institutional, retail and high-net worth clients worldwide. We have a well-established investment banking platform providing corporate finance, wealth management, asset management, institutional clients and investment. Products include fixed income, equities, currency and commodities and derivatives.

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As a global organisation, we are proud of our commitment to acting ethically and with integrity in all our business relationships. As a reflection of our commitment to corporate and social responsibility, HTI has been recognised as a “Caring Company” by The Hong Kong Council of Social Service for more than ten consecutive years. Since 2015, the “Haitong International Charitable Foundation” has also received the “Caring Organization” logo. See our Corporate and Social Responsibility Report here.

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In order to meet our tax obligations and the expectations of our customers and stakeholders, and to live up to our reputation as a good corporate citizen, we seek to operate in a manner that is both sincere and open. We possess a sound risk management system that is in line with international standards and the management of risk permeates every aspect of how we conduct our business.

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This Tax Strategy document

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Specifically, this Tax Strategy is applicable to our tax activities as they relate to UK taxation. ?

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This document meets the requirement of HTI’s UK subsidiaries to publish their Tax Strategy as required by section 161 and paragraph 19(4) of Schedule 19 of Finance Act 2016. It is effective for the year ended 31 December 2021 and covers all HTI’s UK subsidiaries.

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This Tax Strategy has been developed by the UK CEO.

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Tax compliance and reporting

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We are committed to meeting all our legal and regulatory requirements in paying the correct amount of tax and meeting our UK tax compliance obligations.

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Our commitment to compliance with all UK laws and regulations, including those relating to tax, are firmly embedded in the business and we have an established internal control system and procedures to help achieve this. This includes seeking to apply diligent professional care and judgement in our tax compliance activities, and providing sufficient evidence to support all judgements made.

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Governance and risk management

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The UK board of directors provides oversight in ensuring that tax is considered within the wider context of the business and in how tax risk is managed across HTI. Compliance and risk matters, including those concerning taxation, are regularly included on the agenda at board meetings.

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The UK CEO has responsibility over HTI’s approach to tax on a day-to-day basis which includes the identification, prioritisation and monitoring of tax risk across the business, as well as the escalation of tax risk to the boards of directors. Matters of significance, particularly those with an international dimension, may be referred to the Group’s wider finance function based in Hong Kong.

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Additional support and risk oversight is provided by the Group’s Internal Audit function, as well as the Group’s Audit and Risk Committees.

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HTI has a low appetite for risk in respect of UK taxation and this aligns with the Group’s approach to maintaining our commitment to operating in the highest ethical manner. HTI is not prepared to accept a level of risk that would expose it to reputational harm, or which could adversely impact its relationship with HMRC.

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Where there is significant uncertainty or complexity in relation to tax risk, we will seek input from external advisors.

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Our approach to tax planning

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We have a low risk appetite to tax planning as it affects UK taxation, and tax decisions are aligned to business and commercial strategy. Like any other business expense however, we seek to create value for our shareholders. As such, we may respond to tax incentives and exemptions where appropriate and in a way that is consistent with HMRC and government policy.

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As appropriate, we will seek external professional tax advice to ensure we apply these incentives and exemptions legitimately, and if appropriate, we will seek advance clearances with HMRC to ensure we minimise the risk of uncertainty.

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Relationships with Tax Authorities

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HTI is committed to working with HMRC in an open, honest and transparent manner. Wherever possible, we also seek to achieve early agreement on issues and certainty. This also means that we will seek to work collaboratively with HMRC in terms of keeping them up to date about any commercial developments and events in our business that may have a tax impact. ??

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Approved by the Board - March 2021

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