The following sets out our tax policy. It’s not only an exciting document but it’s also very important. Grab yourself a snack and get comfy.
– Roy W. Freeman Jr., Founder and Executive Chairman, Flamsal Holdings LLC
Flamsal Holdings LLC
Tax Strategy Statement
1. Introduction
This document sets out the tax policy for Flamsal Holdings LLC and its subsidiaries and affiliates. Flamsal Holdings LLC (“Flamsal”) is the ultimate holding company.
Flamsal believes every company has a responsibility to pay its taxes, and as such, Flamsal pays every dollar it owes. We’re proud of the economic contributions we make to the country and communities where we do business.
2. Ownership and approval
The Treasurer of Flamsal owns this document and the board of Flamsal and the boards of Flamsal’s subsidiary and affiliate entities have approved this tax policy.
3. Context
Tax
In our view, business has a wider responsibility to promote good and should not exist purely for commercial profit. We understand that the tax we pay is an important part of our wider economic and social impact and plays a key role in development, both inside and outside the US. We regard it as a critical element of our commitment to grow in a sustainable, responsible and socially inclusive way.
Flamsal’s tax policy is based on four key tax principles:
(i) Compliance
To ensure that Flamsal fulfills its tax compliance obligations, both in the payment and administration of all taxes.
(ii) Risk Management
To ensure that Flamsal puts in place robust controls and procedures to manage tax risk.
(iii) Transparency
To ensure that Flamsal is transparent about its tax strategy and deals with all relevant tax authorities in an open, regular and transparent manner.
(iv) Commerciality
To arrange Flamsal’s affairs in a tax efficient manner by claiming any legitimate tax incentives or reliefs which may be offered by governments, where claiming the incentive or relief is in line with the relevant legislation. We do not enter into arrangements which are against the clear intentions of legislatures and we do not use artificial tax structures that are intended for tax avoidance.
4. Content
The content of this tax strategy statement covers:
(a) the approach of Flamsal to risk management and governance arrangements in relation to US taxation;
(b) the attitude of Flamsal towards tax planning (so far as affecting US taxation);
(c) the level of risk in relation to US taxation that Flamsal is prepared to accept; and
(d) the approach of Flamsal towards its dealings with tax authorities and regulatory agencies.
This tax policy applies to:
- federal, state and local corporate taxes;
- federal, state and local pass-through entity taxes;
- federal and state employment related taxes;
- sales tax; and
- other miscellaneous taxes.
5. Tax Risk Management and Governance Arrangement
Tax Risk
Flamsal wants to pay the right amount of tax. Tax risk is the risk that we may overstate or understate the tax that we believe is due to various federal, state or local governmental bodies. We recognize that Flamsal’s tax risk may tend to be higher because of our desired size, complexity and the pace of business change. Given that tax is inherently complex, we will invest significant resources in managing and monitoring our tax risk to ensure that we pay the right amount of tax.
Governance Arrangements
For company governance and tax governance purposes, Flamsal is divided between the ultimate holding company, primary subsidiaries, and secondary subsidiary and affiliate operating companies. The operating companies carry on the various lines of business whereas the primary subsidiaries and holding company are responsible for providing management services and development and custody of the Flamsal brand and other intellectual properties.
Flamsal’s Treasurer is the chief financial officer for Flamsal and is ultimately responsible for managing the tax compliance affairs of the company, including the management of the finance team that provides tax management services to subsidiaries. The Treasurer is responsible for the operation and management of tax accounting systems, identifying weaknesses in systems and making them more robust to ensure accurate reporting of tax liabilities, where required.
Each operating company’s President is ultimately responsible for the management of their company’s tax risk.
Delegation of tax risk management
The Treasurer’s delegate responsibility for management of tax risk to either the in-house tax team and/or external tax agents. Where material tax risks are identified, external tax advice will always be obtained from a certified public accountant or in some cases, a tax attorney.
Experience and expertise
Flamsal will employ a team of in-house tax professionals and external tax agents to manage the tax compliance affairs of the company. The team will have significant experience, professional expertise and receive technical training, as required.
Flamsal Board – oversight
The Flamsal Board has oversight of all the commercial, financial and legal affairs of the company through representation on the boards of the various entities. Matters giving rise to material tax risk are identified and escalated through operating company Presidents and Flamsal’s Treasurer to the Flamsal Board for resolution.
6. Attitude of the Company to tax planning
Legitimate tax planning
The Company generally seeks to structure commercial transactions in a tax efficient manner in order to maximize Member value. Therefore, Flamsal seeks to optimize its commercial position by claiming tax reliefs and incentives which are available under US and state tax law (and not against the clear intentions of the legislatures). We understand that tax authorities regard claims for such reliefs as legitimate and mainstream tax planning.
Where we are uncertain as to a tax authority’s view on more complex tax matters, we will take external advice and seek to validate the tax authority’s position by notification and/or obtaining pre- transaction clearance if possible.
The Flamsal Board does not set objectives that target a particular effective tax rate for the holding company or any particular subsidiary but sees tax rates as a consequence of the commercial activities undertaken in the US and states where we operate.
Tax Avoidance
Flamsal always considers its reputation, brand, company and social responsibilities when evaluating tax matters and seeks to avoid any tax controversy which may bring the brand into disrepute. Accordingly, Flamsal does not devise or implement US or state tax avoidance schemes.
We focus on building Member value through commercial business activity.
7. Level of tax risk – what is acceptable?
Flamsal pays the right amount of tax and has a low tolerance to tax risk. This will be reflected by:
(i) Flamsal will incur significant expenditure (internal and external) to ensure that it complies with its tax obligations
(ii) Flamsal will not undertake any transactions which aim to secure tax advantages rather than any commercial objective
(iii) Flamsal will ensure that sufficient and knowledgeable resources are available to undertake Flamsal’s tax compliance obligations in all jurisdictions
(iv) the Board directs its tax advisers and in house tax team to take a prudent approach in dealing with the Company’s tax affairs.
US and state tax law remains complex and tax outcomes can sometimes be uncertain. Accordingly, Flamsal will frequently seek an opinion from external advisers to confirm its understanding of how complex tax law is likely to operate to ensure it is complying with both the letter and spirit of the tax laws.
Flamsal will also seek guidance from advisers to keep up to date with new legislation and policies particularly where the application of tax principles may be new and/or uncertain.
Flamsal does not use and will not use prescribed tax evaluation criteria to quantity tax risk.
8. Dealings with tax authorities
Flamsal is planned to grow into a large business and will diligently monitor its tax compliance obligations. We will work hard to have a good relationship with the tax authorities and aim to resolve any tax issues that may arise through cooperation, full disclosure and dialogue with the tax authorities. In certain circumstances, it may be necessary for the tax authority and Flamsal to work together with external advisers and specialists to resolve tax technical issues of high complexity, in line with the tax authority’s policies.
We will be in regular contact with the tax authorities throughout the year, which may include several meetings to discuss changes to Flamsal, business developments, material transactions in our tax returns, how we have applied any new tax legislation and any on-going tax compliance matters.
Where appropriate, Flamsal will deal with tax authorities on a real time basis to resolve areas of tax risk, in advance of tax filings. Flamsal will seek to disclose unforeseen tax liabilities through voluntary disclosure to tax authorities as soon as possible. Where appropriate, tax clearances will be sought from tax authorities with full disclosure of relevant information.
9. Date of publication
This Flamsal tax policy relates to the financial year from January 1st to December 31st, 2024 and was published on this website (holdings.flamsal.com) on February 17, 2024. This policy document will apply from the date of publication until it is superseded.
The public is able to access this Flamsal tax policy document, free of charge. This Flamsal tax policy document will remain on the holdings.flamsal.com website until it is superseded.
10. List of entities
This Flamsal tax policy has been adopted by the following entities:
(i) Flamsal Holdings LLC
(ii) Flamsal Group LLC and its subsidiaries
(iii) Flamsal Enterprises LLC
(iv) Flamsal LLC and its subsidiaries and affiliates