Ensuring transparent and responsible tax practices worldwide

Sika is committed to transparent, responsible, and sustainable tax practices. Through its Tax Strategy, supported by the Tax Policy and a tax control framework, Sika aligns with applicable national laws and international standards, aiming for predictable long-term outcomes that support the business, stakeholders, and communities in which the company operates.

Tax strategy

Sika actively manages tax matters to comply with applicable laws and to achieve market-based outcomes consistent with the substance of business activities. Sika aims to pay a fair share of tax in each of the over 100 countries where it operates, reflecting the global footprint and decentralized business model. Over time, this approach supports a stable and appropriate effective tax rate for the Group as indicative of Sika’s commitment to being a socially responsible fiscal citizen worldwide.

Tax governance

Sika’s approach to tax is guided by its corporate values and is designed to comply in good faith with both the letter and the spirit of applicable tax laws and international standards. Therefore, a fair amount of taxes is paid in each jurisdiction where Sika operates. The governance framework integrates the Tax Strategy, Tax Policy, and tax control framework into the Group’s broader risk management and internal control system. Material tax matters are managed through defined processes that emphasize compliance, transparency, and sustainable, business aligned outcomes.

Tax risk management and control framework

Sika proactively manages, monitors, and controls tax risks to achieve sustainable and predictable outcomes. We operate within defined risk parameters aligned to the Group’s operations and responsible strategies. Key elements include a focus on policy, controls, monitoring, and certainty mechanisms:

  • Application of the arm’s length principle to intercompany transactions and maintenance of contemporaneous transfer pricing documentation in accordance with local requirements.
  • Defined controls over tax compliance, financial reporting, planning, and tax data quality, with periodic monitoring and review.
  • Use of mutual agreement procedures or other cooperative compliance mechanisms where appropriate to obtain certainty.
  • Ongoing monitoring of legislative developments and timely implementation of required changes.

Sika does not engage in aggressive tax planning. The company does not use complex structures without commercial substance or offshore entities lacking business purpose, nor employ hybrid instruments or entities to achieve double deductions, nontaxation, or similar outcomes, or implement arrangements based solely on form that are contrary to legislative intent and substance. Relevant transactions are disclosed and fulfill local mandatory disclosure requirements or international disclosure platforms, i.e. DAC 6 in the European Union. Where tax incentives or reliefs are available and aligned with the policy intent and business substance, Sika may utilize them in a transparent manner. Where appropriate, external advisors help manage tax risks and ensure high-quality compliance.

Sika promotes open, constructive, and professional relationships with tax authorities. Where suitable, available mechanisms - prefiling reviews, rulings, mutual agreement procedures, or other cooperative compliance mechanisms - are used to obtain certainty on significant transactions. Tax audits are conducted cooperatively, and requested information is provided in a timely and complete manner. When invited, Sika may provide technical input on proposed legislation through appropriate channels.

Since 2016, Sika has prepared an annual OECD Country-by-Country Report (CbCR), filed with the Swiss Federal Tax Administration and exchanged with relevant jurisdictions under applicable agreements. The report provides information on revenues, profits, employees, and taxes by country and supports tax authority for risk assessment.

Sika will comply with applicable public country-by-country reporting requirements, including those in the European Union where in scope, and intends to publish the report in line with the applicable legal timelines.

Sika is monitoring and implementing the OECD/G20 Pillar Two rules in jurisdictions where they are enacted, including the use of qualified domestic minimum top-up taxes and applicable safe harbors. Sika adopts processes and controls to ensure timely and accurate compliance and will provide relevant disclosures in its financial reporting.

View and concerns of stakeholders

Sika is committed to openness and transparency. The Sika Trust Line allows for anonymous reporting directly to the attention of Corporate Compliance.