Tax Strategy
Show content of Our purpose
We are here to enable sustainable economic growth and societal progress by generating positive impact for our clients, our people, our investors and our communities.
We achieve this by being a leading European bank with a global reach. We value our German roots and remain committed to our international presence.
We serve stakeholders best by offering solutions to our clients and participating in value creation by them. In doing so, we seek to ensure that our bank is competitive and profitable while being underpinned by strong capital and liquidity. We are committed to a culture that appropriately aligns risks and rewards.
To deliver this, we aim to attract and develop talented individuals. We foster teamwork, partnership and inclusion, trusting that each of us will deliver to the expected standards.
In keeping with this purpose, we apply the principles set out in this document in the management of our tax affairs. These tax principles, which have been embedded in the bank’s control framework for a number of years, have been approved by our Management Board and apply to all our businesses and group entities.
The key principles are:
- We undertake our tax affairs on a basis which generates sustainable value while meeting applicable legal and regulatory tax requirements.
- We give due regard to the intent and spirit of tax laws, the social context within which the bank operates, and the bank’s standing and reputation with the public, tax administrations, regulators, and political representatives.
Show content of Approach to tax risk management and governance
Our risk management framework consists of various components. Organisational structures must follow the Three Lines of Defence model with a clear definition of roles and responsibilities for all risk types. The 1st Line of Defence refers to those roles in the bank whose activities generate risks, whether financial or non-financial. The 2nd Line of Defence refers to the roles in the bank who define the risk management framework for a specific risk type. The 2nd Line of Defence independently assesses and challenges the implementation of the risk type framework and adherence to the risk appetite, and acts as an advisor to the 1st Line of Defence on how to identify, assess and manage risks. The 3rd Line of Defence is Group Audit, which is accountable for providing independent and objective assurance on the adequacy of the design, operating effectiveness and efficiency of the risk management system and systems of internal control.
Based on this model we have a clear framework setting out roles and responsibilities for defined tax types to ensure we remain compliant with our tax obligations.
Show content of Attitude towards tax planning
We manage our tax affairs in a way which aims to ensure that the tax consequences of business operations are appropriately aligned with the economic, regulatory and commercial consequences of those business operations, with due regard being given to the potential perspective of the relevant tax authorities.
In conducting our business affairs, setting up and structuring our business operations and commercial activities, we consider – among other factors – the tax requirements of the respective jurisdictions in which we operate, with a view to generating sustainable value to Deutsche Bank and its shareholders. In this context we may seek to avail ourselves of tax benefits and beneficial tax rates available under those tax laws. Uncommercial artificial steps for the purpose of obtaining tax benefits should not be undertaken. In addition, we do not endorse confidentiality arrangements which seek to preclude disclosure or reporting to tax authorities nor do we endorse success fee arrangements determined by the amount or existence of tax benefits.
Our in-house Group Tax function is an independent risk and control function separate to our business divisions and we employ skilled professionals to ensure that our position with respect to the bank’s own tax matters is robust. In appropriate situations our internal experts may take specialist external tax advice.
Show content of Level of risk
Our business is subject to various risks, including tax-related risks. We seek to understand and mitigate these risks where possible. A number of tax-related risks are an inherent consequence of the scale and diversity of our business activities and the international nature of our business. This is exacerbated by the growing complexity of international tax laws and divergent approach of national tax authorities in various instances.
In accordance with our principles, we operate a control framework and governance to ensure that in all material aspects we are compliant with applicable tax laws, we file accurate tax returns, and we pay the amount of tax due.
Show content of Relationships with tax authorities
We aim for our dealings with tax authorities to be undertaken in a proactive, transparent, professional, courteous and timely manner and seek to develop and foster good working relationships with tax authorities.
In 2010 we were among the first banks in the United Kingdom to adopt the UK Code of Practice on Taxation for Banks.
Show content of Preventing tax evasion
Tax evasion and facilitating tax evasion are financial crimes and go against our culture, values and beliefs. Our policies strictly prohibit aiding or abetting tax evasion.
We advocate the development of sound regulations and internal procedures to combat financial crime, including tax evasion, and do not endorse actions that seek to undermine tax reporting of financial account information under applicable legislation, such as the Common Reporting Standard (CRS) or the Foreign Account Tax Compliance Act (FATCA). These requirements are also intended to prevent our bank from committing or facilitating – intentionally or negligently – criminal offences.
We are prepared to discontinue, and have discontinued, relationships with clients and other third parties in order to safeguard our bank against the risk of committing or facilitating tax evasion, as well as the risk of other forms of financial crime.