UK Tax Strategy 2023
Introduction
This is the UK tax strategy of Pegasystems Limited (“Pegasystems”) and its UK subsidiaries This strategy is published in accordance with the reporting requirements prescribed by paragraph 19(2), Schedule 19 of the Finance Act 2016, for Pegasystems’ financial year ended 31 December 2023.
Commitment to compliance
Pegasystems is committed to compliance with all relevant UK tax law and practice in respect of all applicable UK taxes, including (but not limited to) Corporation Tax, National Insurance and PAYE obligations, VAT, and other indirect taxes.
Compliance means paying the amount of tax that is legally due, when it is due, and adhering to all mandatory tax reporting and tax disclosure requirements.
This is underpinned by two of the core principles in the Pegasystems Code of Conduct -
To comply with the letter and spirit of the laws and regulations applicable to our business; and
To be honest, fair and trustworthy with customers, employees, partners, investors and governmental agencies.
https://www.pega.com/about/leadership/governance/code-conduct
This Code, introduced to promote the highest standards of ethical and legal conduct within the group, must be observed by the Pegasystems’ Board and all employees of Pegasystems.
Pegasystems receives guidance from external professional tax advisory firms to ensure that it is complying with all current and applicable tax legislation. These advisers also assist with either the preparation and filing, or review and validation, of returns for PAYE, VAT and Corporation Tax in the UK.
Responsible attitude to arranging tax affairs
Pegasystems is committed to compliance with tax legislation in all the jurisdictions in which it operates.
In structuring its commercial activities, it seeks to maximise shareholder value and therefore pursue tax efficiencies when opportunities exist to do so, taking advantage of reliefs and incentives that are prescribed in legislation.
Pegasystems only seeks to engage in tax planning that conforms with its strategic commercial objectives and will not enter into arrangements of a contrived or artificial nature.
Pegasystems seeks to ensure that its transfer pricing policies comply with the current OECD guidelines.
Advice is sought from external professional tax advisory firms on any matters where there are material uncertainties with respect to tax positions adopted.
Effective risk management
Responsibility for setting this Tax Strategy rests with the Director, Tax, who is responsible for designing the Tax Strategy and who, with the Senior Director, Finance, is responsible for monitoring ongoing compliance as part of the broader risk management framework. The Tax Strategy is applied on a day-to-day basis by the Global Pega Finance team, who have responsibility for risk management implementation with respect to taxes, under the supervision of the Director, Tax, who reports to the Chief Accounting Officer and VP of Finance, a member of the Board.
Tax risk arises due to the complexity of tax legislation and potential differences in interpretation. Pegasystems assesses the acceptable level of UK tax risk on a case by case basis.
In order to mitigate tax risks in processes key to tax compliance, Pegasystems endeavours to design and construct effective internal controls and to recruit suitably qualified and experienced tax personnel. The tax function seeks to form relationships with internal stakeholders to -
- develop a deeper understanding of business operations and therefore any attendant tax risks
- raise awareness of tax compliance requirements
- to promote itself as a useful business resource, able to advise and if necessary, arbitrate when commercial and legal requirements conflict
In order to mitigate the tax risk of complex tax law and regulations, external professional tax advice is obtained to inform business decision making.
Constructive approach to engaging with HMRC
Pegasystems engages with HMRC in an open, transparent and co-operative manner.
Pegasystems endeavours to file and pay all UK taxes accurately and on time.
In cases where there is uncertainty over the interpretation of tax legislation or of how it should be applied in a specific business context, Pegasystems would seek to resolve this through open dialogue, with reference to supporting legislation and HMRC official guidance.
If HMRC raises an enquiry, Pegasystems will provide all reasonably requested information, relevant to such an enquiry, as expeditiously as possible.
This statement is approved by the Pegasystems Board of Directors.