Arla Foods Annual Report 2020
Management Review
Our Strategy
Our Brands and Commercial Segments Our Responsibility Our Governance
Our Performance Review Our Consolidated Financial Statements
Our Consolidated Environmental, Social and Governance Data
RESPONSIBLE AND TRANSPARENT
TAX PRACTICES
In Arla, we acknowledge that tax is vital for the economic and social development. Conforming with our Code of Conduct
and Good Growth identity, we are strongly committed to paying our taxes legally due and reporting transparently on our
tax practices.
Taking a responsible and transparent approach to
tax matters supports the strategy of growing our
company on a solid foundation and is in line with our
commitment to the UN Sustainable Development
Goals (SDGs). Our tax payments contribute directly
and indirectly to the majority of the SDGs, but in
particular to SDG #16.6-development of
effective, accountable and transparent institutions.
We are committed to paying taxes in the countries
where we operate and generate value as well as
ensuring that requirements on tax reporting and
tax transparency are met. We strive for an open
dialogue with tax authorities around the world
regarding our business and our tax affairs.
Our key tax principles
Our approach to tax matters conforms with
Arla's global Code of Conduct and is founded on
a set of key tax principles approved by our Board
of Directors:
Arla aims to report the right and proper amount
of tax according to where value is created
Arla is committed to pay taxes legally due and to
ensure compliance with legislative requirements
in all jurisdictions in which the business operates
Arla does not use tax havens to reduce the
group's tax liabilities
Arla will not set up tax structures intended for
tax avoidance which have no commercial
substance and do not meet the spirit of the law
■■Arla is transparent about our approach to tax
and our tax position. Disclosures are made in
accordance with relevant regulations and
applicable reporting standards such as Interna-
tional Financial Reporting Standards (IFRS)
■■Arla builds on good relations with tax authorities
and trusts that transparency, collaboration and
proactiveness minimise the extent of disputes
In order to always adhere to our key tax principles,
our global tax function is organised to ensure that
we have the right policies, people and procedures
in place to promote strong tax governance.
Cooperative and corporate tax
As a cooperative, Arla's farmer owners are also our
suppliers, and earnings are not accumulated in
the company but paid to the farmers in the form of
the highest possible milk price. Based in Denmark,
Arla Foods amba is governed by the Danish tax rules
for cooperatives paying income tax in Denmark
based on the value of its equity.
Arla operates several subsidiaries globally. Our
subsidiaries are primarily limited liability and private
limited companies subject to regular corporate
taxation.
Value generation through milk payments
In 2020, Arla generated a total value of
approximately EUR 5.2 billion* from the milk
supplied. Milk from our farmer owners generated
EUR 4.6 billion in milk payments, while other
farmers received milk payments of EUR 478 million
VALUE GENERATION
THROUGH PAID OUT
MILK PRICES
1,867
Milk payments
989
to farmer owners
659
per country
EURM
1,131
leaving EUR 122 million in Arla. As a result, the
majority of the taxes are paid at farm level subject
to local tax rules.
*On account milk price for the year plus an estimated
supplementary price of 1.75 EUR-cent/kg owner milk
478
EURm paid to
other farmers
0
122
EURm remained
in Arla
4.6
EURb paid to
■ DK
■ UK
SE
DE, NL, BEL, LUX
farmer owners
48 ARLA FOODS ANNUAL REPORT 2020View entire presentation