British American Tobacco Malaysia - Tax Strategy

The Group’s tax strategy is approved by the Board. The operation of the strategy is managed by the Finance Director and Head of Tax. The Board considers tax risks that may arise as a result of our business operations.

In summary, the strategy includes:

•  Complying with all applicable laws and regulations in Malaysia;
•  Being open and transparent with tax authorities and building mature professional relationships;
•  Supporting the business strategy of the Group by undertaking efficient management of our tax affairs in line with the Group’s commercial activity;
•  Transacting on an arm’s-length basis for exchanges of goods and services between companies within the Group in accordance with appropriate transfer pricing rules and OECD principles; and
•  Engaging in pro-active discussions with tax authorities on occasions of differing legal interpretation, where possible.

Where resolution is not possible, tax disputes may proceed to litigation. That being the case, the Group will seek to establish strong technical positions.

Where legislative uncertainty exists, resulting in differing interpretations, the Group seeks to establish that its position would be more likely than not to prevail.