Moody’s Corporation (“Moody’s”) is publishing this strategy statement on behalf of its UK subsidiaries and branches in relation to its approach to conducting its tax affairs and managing tax risk in the UK.  This statement is made pursuant to the requirements outlined in Para 16(2), Schedule 19 of the Finance Act 2016.  It will be reviewed annually and remain in effect until any amendments are approved by Moody’s.

Moody’s tax strategy is aligned with our overall approach to corporate governance and risk management, including our Code of Business Conduct.  As with our broader business activities, integrity, honesty and ethical behavior guide our approach. 

Moody’s Group UK Organizational Structure

This tax strategy statement applies to all Moody’s group companies and branches that are incorporated within the UK and/ or tax resident in the UK (collectively “Moody’s UK”).

Tax Risk Management

Moody’s is committed to complying with all tax laws in the jurisdictions where it operates, including the UK.  We maintain robust internal procedures and processes to support our global tax control framework and employ appropriately qualified and experienced personnel to properly identify, evaluate and manage tax risk.  Professional care and judgment is employed to assess tax risks in order to arrive at well-reasoned conclusions on how the risks should be managed. 

Our tax function maintains close working relationships with our businesses in the UK and provides them with the appropriate guidance to ensure compliance with the UK tax laws.  Engagement with stakeholders ensures that tax risks are identified in a timely manner and any appropriate mitigating action is undertaken.  This results in an open and transparent environment within which tax risk can be managed.    

Moody’s recognizes that external tax advisors can add value, particularly when providing advice regarding new legislation and case law or in complex areas where further analysis is beneficial.  All external advice is reviewed by the in-house tax team to ensure any outcome is consistent with our overall tax strategy and approach to managing risk. 

Approach to Tax Planning

Moody’s complies with all tax rules and regulations on a worldwide basis and engages in tax planning that is aligned with our business operations.

Moody’s recognizes that it has a responsibility to pay an appropriate amount of tax in each of the jurisdictions in which it operates and aims to balance this with its responsibility to its shareholders to structure its operations in an efficient manner.  Any tax planning undertaken by us will have commercial and economic substance as well as regard for the potential impact on our reputation and broader business goals. 

Transactions between Moody’s group companies, including its UK companies, are conducted on an arm’s length basis.

Level of Tax Risk

As a large, multinational organization, Moody’s and its UK subsidiary companies and branches can be exposed to tax risk. Where such risks arise, they are identified, evaluated and managed in a proactive manner.  We monitor operations, tax structure and arrangements so that they comply with changing tax laws and regulations.  We consult with external advisors when there is uncertainty as to the proper interpretation or application of tax laws or regulations related to a material transaction.

We fully support and comply with initiatives to improve international transparency on taxation matters, including OECD measures on country-by-country reporting and automatic exchange of information.

Open and Transparent Relationship with HMRC

Moody’s UK is committed to cooperate with HMRC in a professional and collaborative manner.  We are committed to being transparent about decision-making, governance and tax planning.  In the event of a disagreement with HMRC, we aim to resolve disputes in a timely and professional manner through full cooperation and with open and honest dialogue.  Our objective is to reach agreement on such matters within a reasonable timeframe in order to remove uncertainty and mitigate tax risk.