​​​​​Tax Strategy relevant to the UK Group of OOCL for Year-ended 31 December 2025^[1]   

The Business's Tax Arrangements

The UK Group companies subject to UK taxation arrange their UK tax affairs through the usual mechanisms of preparing and submitting returns for Corporation Tax, VAT and Employment Taxes.

Two of the companies qualify to calculate and pay Corporation Tax on the basis of the specialist Tonnage Tax rules.

How Tax Risk is Managed

Tax risks arising from the businesses of the UK Group are not considered to be high, as evidenced by the Low Risk rating regularly agreed by HMRC. Tax on the businesses subject to Tonnage Tax is calculated on a well understood formula basis, and where any uncertainties of interpretation or application may give rise to tax risk these are addressed by taking specialist professional advice and where necessary approaching HMRC for clarification or ruling.

Tax risk relating to non-Tonnage Tax parts of the business would principally arise from transfer pricing of services provided. This risk is managed through regular professional Transfer Pricing studies which are shared with relevant tax authorities.

Tax Risk is not separated from the Group's operating unit's risks. Accordingly, the Operating Units identify and manage tax risk, by the direct involvement of experienced and knowledgeable staff, in conjunction with independent professional advisers and auditors as appropriate. The Operating Units work within the reporting and control framework of a Risk Management Department, which designs, implements and assesses the internal control systems. This Team operates within the guidance of the Risk Committee, which leads and facilitates the assessment and management of risk, and reports to the Board, which has overall responsibility for the overseeing of risk management which it will consider and discuss at regular Board meetings. The Internal Audit function conducts independent reviews to monitor the effectiveness of risk management and internal control systems and reports to the Audit Committee to enable it to assess the effectiveness of risk management. The companies are in addition subject to annual audit by professional independent Auditors.

The Group has comprehensive risk management policies, guidelines and processes set up for business Units and Operating Units, including the following:

• Procedures to safeguard assets against unauthorised use or disposition, to maintain proper accounting records, for assurance of the reliability of financial information for internal use or publication, and to ensure compliance with applicable laws and regulations.
• Systems and procedures to identify, measure, manage and control risks including business, compliance, operational, financial and information services risks.
• Procedures for the control of capital and major expenditure commitments.
• Procedures for handling and dissemination of inside information.
• Procedures for handling external affairs about the Group.
• Guidelines to be followed by senior management and employees in dealing with confidential and inside information.

On Financial Control:

• OOIL has a set of corporate financial policies, i.e. processes which are followed by all subsidiaries/regional offices of the OOIL Group in the preparation of statutory accounts, management reports and annual budget. These financial policies are reviewed and updated by Financial Control Department in Head Office regularly.  The internal audit function monitors compliance with policies and standards as well as the effectiveness of internal control structures across OOIL and the Group. The Head of Internal Audit reports to the Audit Committee and then the Board on a regular basis. Ad hoc reviews are conducted on any areas of concern identified by the Audit Committee, and the management of OOIL and the division and any affected subsidiary will be notified of any deficiencies noted for rectification. Internal Audit will follow up on the implementation of audit recommendations.

Specifically, in relation to Tax Risk management, overall responsibility for tax lies with the Group's Chief Financial Officer, and in relation to the UK taxable companies, with the Financial Controller of each company, who is also the Senior Accounting Officer within the terms of UK tax law. There are global guidelines on tax compliance, procedures and processes developed by the Head Office's Tax Team to define the responsible parties and steps required for ensuring tax compliance within the Group.

Attitude to Tax Planning and the Group's Tax Risks

Integrity in compliance and reporting in each tax jurisdiction is seen as the primary tax strategy of the Group. Tax itself is seen as a cost of doing business and as with all costs should be managed to a level regarded as reasonable and competitive for the jurisdictions in which it operates.

OOIL Board assesses and approves the Group's activities based on commercial grounds with tax consequences taken into account as part of the cost of that activity. Business team and Finance / Tax team work in collaboration.  

Accordingly, the businesses' internal governance functions do not define or have rigid levels of acceptable tax risk, other than to say that a business transaction entailing a potential level of tax which was not commercially reasonable would not be likely to be approved.

Working with HMRC

The OOCL Group in the UK, as part of the worldwide OOIL Group, is committed to “embrace an ethically-sound code of conduct". To this end the Group is committed to “conduct business with the highest standards of business ethics and integrity in accordance with trade practices. These have become the Group's core values which are incorporated into day-to-day business considerations".

Maintaining good relations with tax and other regulatory authorities and complying with the tax requirements of the jurisdictions in which the Group operates is part of this commitment to business ethics and integrity. Achieving a low risk status with HMRC is regarded as an indicator that the Group is meeting its objectives in this regard, requiring, as it does that the UK Group should satisfy the Revenue authorities in relation to all relevant categories of UK taxation. Accordingly, the UK Group meets its responsibility to file returns, reports, elections and claims rigorously and timeously, with the assistance of external professional advisers where necessary. In addition, the Group seeks to maintain a regular and open dialogue with HMRC's Customer Relationship Manager and other responsible officers in the HMRC team.

[1] Publication of this strategy is regarded as meeting the group's obligation to publish its strategy regarding UK taxation in accordance with paragraph 19(2) Schedule 19 of the UK Finance Act 2016