The Group and its subsidiaries operate worldwide and are consequently subject to different national tax laws and regulations. National tax audits of our entities are conducted on an ongoing basis by the tax authorities of the respective countries in which we operate. Tax risks originate particularly from the changes in national tax laws and regulations, and case laws and interpretations by national tax authorities, as well as from significant transactions such as acquisitions, divestments and reorganizations.
Findings of the national audit authorities of the various countries may lead to higher tax expenses and payments and may also have an impact on the amount of tax receivables, and tax liabilities as well as on deferred tax assets and liabilities.
The Group’s tax function regularly and systematically assesses the relevant tax risks. Appropriate standards are put in place to identify tax risks at an early stage in order to review, assess and mitigate them effectively and efficiently. Mitigation measures are coordinated by the tax department with the subsidiaries. Risks in addition to those already considered in the balance sheet are classified as improbable to possible with potential moderate to substantial impact on the net asset, financial position, and results of operations.
For information on the accounting and measurement policies for income taxes, please refer to the section “Income tax” in “Notes to the Consolidated Financial Statements” in the annual report.