Business integrity
 

Encouraging a ‘Speak-up’ Culture and Managing Reported Cases

Confidential Reporting Line
According to the Kuehne+Nagel Code of Conduct, our employees are encouraged to raise concerns over potential issues they observe via various available channels; including the Kuehne+Nagel Confidential Reporting Line, even anonymously if desired, operated by an external service provider, accessible 24/7, and available in more than 100 languages.

Progress 2021
In 2021, we took the opportunity of a service provider change for the Confidential Reporting Line, to reiterate awareness to our employees by putting up newly designed posters with Confidential Reporting Line contact information and updating our intranet pages accordingly.

Allegation Management
Kuehne+Nagel’s Independent Allegation Management Committee assesses all incoming reports. Where necessary, professional and independent investigations are initiated in line with our Group Allegation Management Guideline to resolve concerns raised, and remediation applied effectively. These procedures comply with laws and regulations and help detect and resolve issues proactively that otherwise may result in an adverse effect on the Group, its stakeholders, or its customers. Cases with material impact on the Group have been disclosed in our annual reports and media releases, respectively. Reporting issues always helps Kuehne+Nagel solve them effectively and take the right actions to prevent re-occurrence, including applying our Group Disciplinary Actions Guideline.

Progress 2021
In 2021, 220 allegations were coordinated by the Independent Allegation Management Committee. The committee instigated actions for investigation and remediation as needed, including engaging external law firms or forensic experts.

  * HR cases include e. g. employment term issues, inappropriate behaviour, discrimination, and conflicts of interest
** Non-HR cases include e. g. improper payments, fraudulent activities, and other issues such as in export controls, data privacy, or competition law

Executing Responsible Tax Management

Kuehne+Nagel is one of the world's largest integrated logistic providers. Kuehne+Nagel strives to be a world-class operator, the employer of choice in logistics, and a good corporate citizen.

Kuehne+Nagel’s business activities generate a substantial amount and across various taxes such as corporate income tax, stamp duties, or withholding taxes. Kuehne+Nagel further collects and pays value-added and other indirect taxes and employee taxes.  Altogether, these taxes paid form a significant part of the economic contribution to the countries in which Kuehne+Nagel operates.
 
The Report provides an overview of our Tax Mandate, Code of Conduct and Tax Governance Framework. Kuehne+Nagel believes that responsible tax behavior is crucial for its sustainability strategy.

Tax Mandate and Code of Conduct
Kuehne+Nagel commits to being a responsible corporate citizen. Our Group Tax Mandate includes our obligations to:

• Responsibly manage the Group’s tax affairs and protect shareholder value in line with the Group’s Code of Conduct
• Provide adequate tax advice service and business-critical communication to the Group’s Audit Committee, Group Management Board, Business Units and other important Stakeholders
• Maintain a strong tax control environment and tax risk framework that considers current tax law regulations and practice

Kuehne+Nagel’s Code of Conduct sets the expectation for everyone at Kuehne+Nagel and includes the Group’s approach to tax.

Tax Governance Framework
Tax Governance Framework is owned by Group CFO, overseen and reviewed by the Audit Committee. The implementation is the responsibility of the Head of Group Tax reporting to the CFO. They inform the Management Board and the Audit Committee as and when appropriate. The reports comprehensively explain the nature of any impacts of implemented business models on tax, the associated tax implications and potential tax audit issues. Updates are provided on governments’ tax policies in areas where they may impact the Group.

Tax Principles:
 
1. Compliance
Kuehne+Nagel acts according to the applicable tax laws and comply with international standards, namely Organisation for Economic Co-operation and Development (OECD) standards. If the letter of the law is unclear, or does not provide answer, Kuehne+Nagel complies with the spirit of the law. Kuehne+Nagel respects the government’s right to determine its tax rate and collection mechanisms.
 
2. Substance, Transparency and Arm’s Length Principle
Kuehne+Nagel engages in efficiently structuring tax, which is understood as following the commercial reality from operating its business models. For taxation of profits, Kuehne+Nagel attributes taxable results only where substance and commercial values are created. Kuehne+Nagel understands substance as economically owning assets and actively executing decisions to manage risks associated with this taxable result. Kuehne+Nagel is transparent in its approach to tax. All transactions must have a commercial and business reason. Kuehne+Nagel adheres to the OECD’s arm’s length principle.
 
3. Relationship with tax authorities
Kuehne+Nagel constantly aims to develop and sustain a mutually respectful relationship with tax authorities based on trust and transparency.

4. Tax Risk Management
As a large multinational operating company in more than 100 countries, Kuehne+Nagel is exposed to a variety of tax risks as follows:

• Tax reporting and compliance risk: This risk is manifested through failures associated with submission of late or inaccurate returns, claims and elections not made in time or where the finance or operational systems and processes are not sufficiently robust to support tax compliance and reporting requirements;
• Transactional risks: These risks may arise where transactions are executed without appropriate consideration of the potential tax consequences or where advice taken is not correctly implemented;
• Reputational risk: This risk occurs on Kuehne+Nagel’s relationship with its stakeholders, such as shareholders, customers, tax authorities and the general public.

These risks are managed as per the following principles:

• Kuehne+Nagel manages these tax risks following its ICS (The International Centre for Settlement of Investment Disputes) similar to operational risks across the Group.
• In addition to its Group’s tax oversight role, Corporate Tax provides advice to the Group and its business activities on tax-related issues, undertakes or assists with tax filings, manages relationships with tax authorities and assists in various forms of tax reporting. Internal controls and escalation procedures are put in place to identify, quantify and manage key tax risks.
• Where appropriate, Kuehne+Nagel looks to engage proactively with tax authorities to disclose and resolve issues, risks and potentially uncertain tax positions. The subjective nature of many tax rules means that it may be challenging to mitigate known tax risks. Whenever Kuehne+Nagel’s approach is consistent with the principles set out in the tax strategy and where the range of possible outcomes is following the Group's risk appetite, an element of tax risk may arise. As a result, at any given time, the Group may be exposed to financial and reputational risks arising from its tax affairs.