Responsible tax
We recognize the taxes we pay and the jobs we create are important parts of our contribution to the societies in which we operate. Taxation plays a key role in helping countries finance their policies to achieve the UN SDGs.
Over the past years, we have embraced the responsible tax principles allowing them to be endorsed in our Global Tax Strategy, which is approved by the Board of Directors.
Overall, we aim to:
- Ensure we pay our fair share of taxes supporting the communities in which we operate.
- Proactively manage and mitigate tax risks and maintain a high quality of tax compliance processes.
- Engage with policymakers, authorities and interest groups to support transparent and responsible tax practices.
Building our responsible tax practices
In 2022, we made our Tax Strategy internally available in more languages and provided training to create awareness amongst employees. The strategy is now available in six languages: English, Czech, Danish, Hungarian, Spanish and Chinese. To make sure that the information about our tax strategy reaches the right people internally, we have created several engagement opportunities, like our Compliance week.
In order to help progress our strategy and make sure that we are evolving our approach to tax in line with our ambitions, we have in recent years focused on building the right capabilities.
Our reporting framework now also includes two yearly reports to the Board of Directors on the execution of our strategy.
In the past year, we worked closely with tax authorities, including the Danish and Australian Tax Authorities’ respective cooperative compliance programs. The LEGO Group received a score of ‘high’ for our assurance and the second-highest score for our Tax Control Framework as part of the Australian Justified Trust Program. In addition, we are now in dialogue with New Zealand for a similar program.
Our advocacy efforts are mostly done through recognized industry groups. We are a member of the Tax Executive Institute. In 2022, we joined the Board of the EMEA Chapter. In addition to the national industry groups in Denmark, UK, and the Netherlands, we joined the Czech federation in 2022.
In 2023, we will continue our work to actively engage with policymakers and external partners to support better legislation and responsible tax practices.
Total Tax Contribution (TTC)
Our Total Tax Contribution to public finances for 2022 is DKK 12.3 billion, of which DKK 5.1 billion are borne (compromising of all taxes which are a direct cost to the LEGO Group) and DKK 7.2 billion are collected (including all taxes which the LEGO Group has been withholding from others, not impacting our financial results).
To further distinguish our contribution, we divide it into five distinct categories, including:
- Profit taxes: including taxes on the LEGO Group’s profits as well as withholding taxes.
- People taxes: including taxes and social security contributions.
- Product taxes: including indirect taxes on the production and consumption of goods and services, including VAT and sales tax, customs duties, insurance premium tax, etc.
- Property taxes: including taxes on the ownership, sale, transfer or occupation of property.
- Planet taxes: taxes, duties and contributions levied on the supply, use or consumption of goods and services that are considered to be harmful to the environment.
Polices and reporting
The LEGO® Corporate Policy Framework embraces our spirit, “Only the best is good enough” and sets the corporate behavioral directions and framework for our company processes.
