Sustainability
Tax Transparency
Both as a multinational company and as a provider of investments and savings products, the AXA Group follows a responsible and transparent approach on tax issues.
AXA Group Tax Policy
Both as a multinational company and as a provider of investments and savings products, the AXA Group follows a responsible and transparent approach on tax issues.
The taxes AXA pays are an important part of its wider economic and social impact and play a key role in the development of countries where it operates*. AXA regards it as a critical element of its commitment to grow in a sustainable, responsible and socially inclusive way.
AXA also squares its responsibilities as a co-operative, compliant taxpayer in each and every country in which it operates, with the need to support competitive business growth – serving all its stakeholders including investors, suppliers and employees. We seek an open dialogue with our stakeholders, including relevant tax authorities, our shareholders and regulators.
This group tax policy is shared and agreed with the Group Audit Committee once a year.
Tax aspects in relation to AXA as a multinational company
The AXA Group’s approach to tax issues
In the countries where it operates, AXA is both a taxpayer and a tax collector, given that many specific taxes are levied on insurance and reinsurance policies and collected from our customers as part of the insurance, reinsurance and Asset Management revenues while others are remitted to the various state and federal administrations around the world.
The tax function is organized within the Group to ensure full compliance with all tax legislation in the countries where AXA operates. In addition to the Group Tax Department based in France, all key operational entities/countries/geographic zones have a tax team in charge of ensuring that tax regulations are well understood and fully satisfied by the entities.
As a part of the global internal risk assessment, a specific tax internal control program is implemented. These controls must be reported and documented by each team in scope to ensure full compliance. There is a yearly update made to the Group Audit Committee around tax topics with a specific focus on ongoing tax audits and litigation.
A Tax Code of Ethics, agreed between Group Tax Department and local tax teams, highlights the key principles guiding the actions of the various tax teams:
- to remain up to date with respect to applicable laws and regulations;
- to comply with tax laws and regulations;
- to maintain a good relationship with the local tax authorities; and
- not to engage in aggressive tax driven transactions that could compromise the good reputation of the Group, or otherwise put the Group at risk.
Within the objective of keeping good relationship with tax authorities, the AXA Group may seek, when necessary, certainty in advance from tax authorities to confirm an applicable tax treatment based on full disclosure of all relevant facts and circumstances.
The satisfaction of this Code of Ethics is a prerequisite of the activities performed by all AXA tax teams and gives rise to an annual certification by each head of tax, which is provided to the Group Tax Department. In addition, a bi-annual tax review process of each key entity or business line is performed by the Group Tax Department in connection with each local team. During these reviews, specific attention is given to tax audits and associated tax risks as well as market positions on tax matters that may impact AXA. These reviews offer a global framework for the tax teams to identify, analyze, control, and report tax risks.
Lastly, an International Tax Committee composed of various senior tax executives within AXA tax teams meets every quarter to ensure consistency in approach on some technical topics, as well as agreements on guidelines, when necessary, connected to specific items.
As an international group operating in several countries, the AXA Group is subject to various tax regimes and regulations and takes into account any changes in tax law. AXA is specifically vigilant about the changes that could result in higher tax expenses and payments, higher compliance costs or that may affect the AXA Group’s tax liability, return on investments and business operations. In particular, please see the paragraph Changes in tax laws, regulations or interpretations or uncertainties in the interpretation of certain tax laws may result in adverse consequences to our business and our results of operations
in Section 5.1 Risk Factors
of this Annual Report.
When considering how AXA entities structure commercial arrangements, tax implications are analyzed in parallel with other consequences such as capital efficiency and legal and regulatory aspects when deciding between potential alternative arrangements.
AXA has no licensed insurance or operating business activities in the countries specifically identified as non-cooperative jurisdictions** under French and European rules, except in Panama and in Russia. The presence in these jurisdictions is purely driven by operational purposes. In Panama, AXA still holds two non-consolidated operating companies (one providing assistance services to local customers, and the other delivering health claim services) employing circa 40 people.
In Russia, AXA holds a minority financial investment in Reso Garantia, a Russian insurance company.
More globally, AXA does not use non-cooperative jurisdictions to avoid taxes on operational activities performed elsewhere.
Any presence in countries in which AXA operates with tax rates lower than France are driven by business operations. Since the acquisition of the XL Group in September 2018, AXA has a material presence and substance in Bermuda with nearly 200 employees working for AXA XL there. Despite the fact that Bermuda has historically been a low-tax jurisdiction, it is a center of expertise and one of the key locations of the worldwide reinsurance market. It is not considered as a non-cooperative jurisdiction according to the French and European Union laws. This presence is mainly driven by local capital management regulation enabling flexibility on the required capital for reinsurance activities and AXA supports the Economic Substance legislation enacted in this country. It should be noted that Bermuda enacted at the end of 2023 a tax reform to create a corporate tax at 15% as from January 1, 2025. This situation will in no way change how the AXA Group is managed on the tax side. AXA will continue to tax its operations in the various countries where operational profits are made.
Disclosure on tax matters and information on taxes connected with the Group’s activities in each country
The consolidated financial statements are prepared in compliance with IFRS standards (as disclosed in Section 6.6 – Note 1 Accounting principles
of this Annual Report). Accounting for income taxes recognizes both the current tax consequences of transactions and events and the future tax consequences of the future recovery or settlement of the carrying amount of the entity’s assets and liabilities, as required by IAS 12 (see Section 6.6 – Note 1.17.1 Income taxes
of this Annual Report).
The Consolidated Financial Statements present the reconciliation between the theoretical tax charge and the effective tax charge under IFRS. All differences are fully explained (see Section 6.6 – Note 17 Tax
of this Annual Report). It should be noted that in many jurisdictions where AXA operates, the income and capital gains on savings products benefit from a favorable tax treatment, also when such products are included in Life insurance products. This leads to a lower effective tax rate for Life insurance companies.
In addition to the details reported around the Group effective tax rate, AXA reports substantial information on the impacts of any change in local tax regulations on its business, as well as details of the tax burden per line of business and per country. AXA’s income tax expenses/benefits are extensively disclosed in the Annual Report and are broken down by business segment and country. For each, a dedicated paragraph provides a comment about the line related to Tax Income (see Section 2.3 Activity report
of this Annual Report).
Since 2019, AXA has been annually reporting a Tax Transparency report where it discloses a lot of information around its tax footprint in its key geographies, as well as key principles of its tax policy. This report is available on the AXA website (www.axa.com) at the end of the AXA Group Tax Policy page. AXA updates this report annually and the most recent version was issued in May 2023.
Tax aspects of activities and products offered by the Group
Activities of the Group
The Group’s activities are subject to strict regulations and rigorous control in each territory in which AXA operates. In addition to these regulations, AXA has developed a set of detailed internal standards that applies to all Group entities that are managed or controlled by AXA, regardless of the activities undertaken by the entity or its ownership structure.
According to these internal standards, Chief Executive Officers must ensure that staff are fully conversant, and comply with applicable laws, mandatory Codes of Conduct, rules and regulations (including applicable tax laws and regulations) relevant to their area of operations.
This means that local senior management must appreciate the tax implications of the activities in their entity. The main considerations are:
- compliance with the taxation of employees in the territory in which they are employed;
- compliance with the taxation of business undertaken in the territory (including levies and sales taxes); and
- cross-border tax issues.
A specific focus on transfer pricing is made in application of these standards, to ensure that the pricing of our intra-group activities is consistent with the OECD arm’s length
principle as well as with local transfer pricing rules to pay adequate tax on profits where the value is created.
In particular, Chief Financial Officers must ensure that insurance and reinsurance policies entered into represent a true transfer of risk and that their status as insurance or reinsurance contracts could not be subject to challenge. Business between Group companies must be transacted at market prices where a market price exists, or in the absence of market prices, must be supported by formally documented justification for the charge made.
Products offered by the Group
AXA products are not designed to allow or encourage tax evasion. The Group has set up a validation framework to ensure that new products undergo a thorough approval process before they go to market.
The local decision to launch a new product must result from a documented approval process that complies with the AXA Group’s standards in terms of product features, pricing, asset- liability management and aspects related to legal, compliance, regulatory, accounting and reputation.
Moreover, AXA has established strict policies regarding its cross-border activities and knowledge of its customers, in order to ensure that our products and services are not misused for money laundering or tax evasion purposes and are governed by specific rules according to which cross-border Life insurance proposals must be presented to the Group Tax and Compliance Departments for validation.
While all Group entities must in any case comply with local regulations, the Group Tax Department can veto a product if this product is not compliant with internal rules.
Pursuant to Directive (EU) 2018/822, AXA may, as a provider of investments and savings products, have tax reporting obligations with respect to certain cross-border products it designs or implements. In particular, certain investments and savings products with no particular tax motive may be reportable under the above-mentioned Directive.