Complying with tax laws and fulfilling various tax liabilities are part of the social responsibilities of a company. LG H&H abides by domestic and overseas tax regulations, promptly reporting tax information and fulfilling its tax liabilities. Our employees in charge of tax payment handle their tasks conscientiously to maintain a transparent relationship with the tax authorities.
Tax Risk Management
LG H&H clearly specifies the roles and responsibilities of employees in charge of each category for tax payments to run the tax management group and hire tax professionals for higher expertise, thereby minimizing tax risks that may occur in business transactions. We reduce risks by reviewing tax information prior to the decision-making process. When it is unclear to understand any part of the tax law, we consult with external tax professionals, including accounting firms, to find the optimal solution.
Disclosure of Tax Payment Records
We provide corporate tax information in the audit report publicly announced on DART (Data Analysis, Retrieval and Transfer System) run by the Financial Supervisory Service. We disclose the standards for calculating corporate tax expenses, deferred tax assets, liabilities, the details of corporate tax expenses, and effective tax rates in the financial statement and annotations in the audit report.
Fulfillment of Tax Payment Obligations
In terms of international transactions with overseas subsidiaries, LG H&H applies the transfer pricing policy that corresponds to the tax law in Korea and the OECD transfer price guidelines, as well as the Arm's Length Principle. If there is any expected conflict between different countries, we proactively respond to double taxation based the APA (Advance Pricing Arrangement) system. We also comply with duties for the documentation of transfer prices and the submission of a report by country under the BEPS (Base Erosion and Profit Shifting) project. LG H&H does not employ a tax structure that abuses the differences and loopholes in the tax system between different countries to unreasonably reduce its tax liabilities. We legally allocate the taxable income depending on values generated in each country where we operate our business. In particular, we prohibit the transfer of values, including intangible or financial assets, to any region with a loose tax jurisdiction, such as low effective tax rates. We also stringently restrict the use of tax havens.