UK Tax Strategy

Introduction

This paper has been prepared and published to comply with Paragraph 19 (2) Schedule 19 Finance Act  2016 (‘UK sub-groups: Duty to publish a group tax strategy’) and Paragraph 22(2) (‘Qualifying companies:  Duty to publish a company tax strategy’) for the year ended 31 December 2024.  

The tax strategy described herein has been prepared for all UK entities with the worldwide group of Roche  Holding AG (‘Roche’). Entities covered by this strategy paper are Roche Holding (UK) Ltd, Roche Products  Ltd, Roche Diagnostics Ltd, Roche Diabetes Care Ltd, Roche Products Pension Trust Ltd, Roche Healthcare  Trustees Ltd, AVL Medical Instruments UK Ltd, Ventana Medical Systems Ltd, Spark Therapeutics UK Ltd,  Flatiron Health UK Ltd, TMEM16A Ltd, Intermune Holding Ltd, Roche Registration Ltd, Piramed Ltd, Tusk  Therapeutics Ltd, and Inflazome UK Ltd. On 26 July 2024 Roche Diagnostics Ltd acquired LumiraDX UK Ltd,  LKM Innovations Ltd and Sure Sensors Ltd. All of these listed entities are collectively referred to as ‘Roche  UK’ within this paper. Chugai Pharma Europe Ltd and Chugai Pharma UK Ltd publish their own tax  strategy. This paper is reviewed annually, and updated as appropriate and approved by the Board of  Directors.  

Roche’s strategy is to focus on finding new medicines and diagnostics and establishing data-based insights  that evolve the practice of medicine and help patients live longer, better lives. Roche strive to address  unmet medical needs through excellence in science – from early detection and prevention of diseases to  diagnosis, treatment and treatment monitoring.  

Roche UK business activities incur a substantial amount and variety of business taxes including corporate  income taxes, Pay As You Earn, National Insurance Contributions and other taxes. In addition, Roche UK  collect and pay employee taxes and indirect taxes such as VAT. Roche UK operates policies and governance  to ensure compliance with UK tax law. 

Roche UK’s approach to tax

Roche UK operates policies and governance to ensure compliance with UK tax law and it follows the Roche  group approach to tax. In complying with UK tax law, Roche UK considers the spirit in which the UK tax  law is intended. 

Transfer Pricing

One of the basic principles for sustainable tax management is that taxes should be paid where  economic value is generated. Roche applies the “OECD Transfer Pricing Guidelines for Multinational  Enterprises and Tax Administrations”, first issued in 1995. In order to prevent or at least reduce the  probability of double taxation, Roche applies the OECD transfer pricing guidelines as an overarching  principle.  

Transfer prices take into account functions performed, assets used, and risks assumed as well as  documentation of the arm’s length nature of the prices. Transfer pricing decisions are taken in a  balanced manner considering the basic principle for sustainable tax management that taxes should be  paid where economic value is generated.

Transparency

As a minimum standard the OECD/G20 requires countries to request multinational enterprises to  prepare and file a Country-by-Country report containing aggregate tax information per country. For  Roche UK this report is filed with the Swiss Tax Administration. 

Approach to risk management and governance arrangement in relation to UK taxation

Roche UK are committed to compliance with all statutory obligations and full disclosure to HM Revenue  & Customs. Tax compliance for Roche UK means paying the right amount of tax at the right time. It  involves disclosing all relevant facts and circumstances to HM Revenue & Customs and claiming reliefs  and incentives where available and in accordance with applicable law.  

Governance for the correct application of and compliance with UK tax law is a responsibility of the Board  of Directors of each UK company and the specific responsibility of the respective Finance Directors. They  are assisted by the Head of Tax UK&I who manages an in-house team of appropriately qualified and  experienced tax professionals who undertake the day to day activities. The UK tax team ensure that their  tax knowledge is up to date through appropriate training on an ongoing basis and by monitoring and  keeping up to date with changes in tax law.  

Roche UK have established and maintain robust policies and processes to ensure that taxes are calculated  correctly, paid in a timely manner and the risk of error is minimised.  

Tax policies and procedures are continually monitored and updated and employees involved are provided  with appropriate training and professional support. An annual review of tax processes and procedures is  undertaken to comply with the legal requirement to file a Senior Accounting Officer certificate. 

Attitude towards tax planning so far as it affects UK taxation

Roche UK plans its taxes with reference to the relevant UK tax law. When entering into commercial  transactions, Roche UK seeks to take advantage of available tax incentives, reliefs and exemptions, where  appropriate, in line with the UK tax law (e.g. research & development expenditure credits). If there is an  element of uncertainty over the application or interpretation and application of the tax law Roche UK will  seek external advice from a reputable professional adviser for clarity of the position.  

Roche UK do not undertake any tax planning unrelated to commercial transactions. No artificial or  aggressive tax planning arrangements are entered into.  

Roche UK undertakes its intercompany transactions on an arms length basis in compliance with the  relevant tax law and OECD transfer pricing guidelines.  

Roche UK does not accept the criminal evasion of tax nor the facilitation of tax evasion, whether  undertaken by an employee or an associated business partner acting on behalf of Roche UK. 

The acceptable level of risk accepted in relation to UK taxation

The level of UK tax risk Roche UK accepts is consistent with the Roche’s broader business risk  management, compliance and transparency framework. Roche UK adopts Roche’s group risk  management training for all employees covering all relevant aspects of good and compliant business  practice. 

In relation to any specific issue or transaction, the Boards of Directors are ultimately responsible for  identifying the risks, including tax risks, which need to be addressed and for determining what actions  should be taken to manage those risks, having regard to the materiality of the amounts and obligations in  question.  

In some cases Roche UK and HM & Revenue & Customs may disagree on the correct application of the  law and in these circumstances tax risk is judged on a case by case basis but consideration is given to the  financial and reputational impact, complexity and how likely the risk is to arise. Roche UK generally takes  a very conservative approach towards tax risk. 

Approach towards dealings with the HM Revenue & Customs

Roche UK are committed to maintaining a transparent and open relationship with HM Revenue &  Customs. The Head of Tax UK&I has regular dialogues with the appointed Customer Compliance Manager,  who is kept aware of significant transactions and changes in the business. Where tax issues arise Roche  UK seeks to discuss them as soon as possible with HM Revenue & Customs and agree a way forward.  

Any inadvertent errors in submissions made to HM Revenue & Customs are fully disclosed and corrected  as soon as is reasonably practicable.  

Where HM Revenue & Customs takes a different interpretation of the tax impact of a particular business  transaction to Roche UK and its external advisers, Roche UK seeks to resolve the issue though open  dialogue in a prompt and responsible manner.  

The tax strategy described herein has been formally adopted by the Board of Directors of Roche Holding  (UK) Limited and has been approved by Roche Group Tax.