Tax transparency

Approach to tax 

Wesfarmers is committed to full compliance with statutory obligations and takes a conservative approach to tax risk. Our organisation’s tax strategy is publicly available in the  Tax Contribution Report that has been published annually since 2016. 

Our tax strategy is implemented through Wesfarmers’ Group Tax Policy. The Group Tax Policy is reviewed on a regular basis and was last updated and approved by the Audit and Risk Committee in March 2021. Wesfarmers’ Group Tax Policy includes an internal escalation process for referring divisional or business unit tax matters to the corporate Group Tax function. The Executive General Manager, Group Finance must report any material tax issues to the Wesfarmers Board.                                        

Wesfarmers’ approach to regulatory compliance is to operate and pay tax in accordance with the tax law in each relevant jurisdiction. Wesfarmers seeks to have a transparent and cooperative relationship with the Australian Tax Office (ATO) and other relevant tax authorities.   

Our tax strategy is aligned to our Code of Conduct, i.e. ‘The Wesfarmers Way’, and sustainable development strategies of the organisation. Our businesses’ structures are driven by commercial consideration, substance and are aligned with Wesfarmers’ conservative approach to tax risk. 

Wesfarmers believes being transparent about taxes paid is a critical enabler to building trust with our communities and holds us and others to account. Contributing the appropriate amount of tax revenue in the communities in which we operate creates jobs and gives government the opportunity to provide essential services to citizens and confidence to invest in their communities to make them more sustainable over the long term. 

Tax governance and control framework 

The Wesfarmers Audit and Risk Committee ensures the organisation is accountable for compliance with the Group Tax Policy. The Group Tax Policy allocates responsibility for compliance with Applicable Tax Laws¹ in all jurisdictions in which the Wesfarmers Group operates between the corporate office, business units and divisions. It cannot be amended without approval from the Wesfarmers Audit and Risk Committee. Any updates to the Group Tax Policy are communicated to divisional CFOs and division/business unit Tax Managers (or equivalent) by Wesfarmers’ CFO and Group Tax Manager.  

Wesfarmers Group Tax Policy is underpinned by our core values framework of The Wesfarmers Way. The Core Values are Integrity, Openness, Accountability and Entrepreneurial Spirit. 

Acting honestly and ethically, transparency in reporting, accountability for our reputation and adopting an ‘owner’ mindset are key features of the Wesfarmers business model and tax governance framework. Wesfarmers has clear controls and processes within our governance framework to manage tax risks and ensure we meet our regulatory obligations.  

Tax risks: identification, management and monitoring 

Any material or non-routine tax issues or correspondence from any tax authority in Australia or globally must be referred to Group Tax in accordance with the Group Tax Policy. Non-routine tax issues include acquisitions, divestments, major capital expenditure programs and the identification of any unlawful or unethical behaviour in relation to tax. The Executive General Manager, Group Finance must refer any material tax issues advised to Group Tax to the Chief Financial Officer, the Audit and Risk Committee and Wesfarmers Board as soon as practicable. Compliance with the Group Tax Policy is monitored by the Wesfarmers Audit and Risk Committee.

Maintaining appropriate levels of skilled staff within the divisions/business units ensures compliance with Applicable Tax Laws. Where an uncertain tax issue arises, the Group aims for certainty on all tax positions it adopts. Where the tax law is unclear or subject to interpretation, advice is obtained and when necessary the ATO (or other relevant tax authority) is consulted for clarity. All roles and responsibilities of external tax advisors must be documented and approved by the Wesfarmers Group Tax Manager on an annual basis.  

Group Tax supports the divisions/business units by providing internal or external advice on the interpretation and implementation of Applicable Tax Laws, as necessary. Any material tax issues escalated to the Wesfarmers Board are documented in a monthly Board Report. Group Tax updates the Audit and Risk Committee and Board on Wesfarmers’ tax compliance program in Australia and overseas, including country-by-country related party dealings. Detailed reports are provided.

_{GRI 103-1, GRI 103-2, GRI 103-3, GRI 207-1, GRI 207-2, GRI 207-3 , GRI 207-4}