Background

Surf Performance Media is a performance marketing business.  As such, the Company has taken a responsible and transparent approach to the management and control of its tax affairs and related tax risks, by adopting the following tax strategy.  This strategy was approved by the Board of Directors and is regularly reviewed by the Audit Committee and Board of Directors.

The Company is privately owned, but it continues to adopt the same level of responsible risk management and governance framework for tax that befits a listed Company.

The Company is based in Puerto Rico, operates online, and services clients all over the world.  Our tax strategy reflects these facets and evolves to maintain pace with the changing tax environment in which the OECD and governments internationally are working to build an international tax framework that equitably taxes the e-commerce world. 

Approach of the Company to risk management and governance arrangements

Our tax policy and the management of tax risks are assessed as part of the Company’s formal governance processes and are reviewed by the Chief Financial Officer who reports them to the Audit Committee on a regular basis. Day-to-day responsibility for tax sits with the Head of Tax.

Key risks are dealt with through our risk management framework, ensuring that appropriate taxes are paid promptly in each jurisdiction in which we operate and that we safeguard our reputation as a responsible taxpayer.

The risks faced by the Company fall in to three categories:

Tax compliance and reporting risks

These are the risks associated with compliance failures such as submission of late or inaccurate returns, late payment of tax, the failure to submit claims and elections on time or where systems and processes are not sufficiently robust to support tax compliance and reporting requirements.  Where possible Surf Performance Media has implemented governance risk tools to mitigate these risks, such as a global compliance workflow tool that gives the Head of Tax oversight of the status of all corporate income tax returns and tax payments.

Transactional risks

These are the risks associated with undertaking transactions without appropriate consideration of the potential tax consequences or where advice taken is not correctly implemented.  Surf Performance Media seeks to mitigate this risk through constant engagement with the Company’s Executive and Senior Management team to understand the Company’s commercial strategy, M&A activity, new products, new geographies, and other transactions before they occur, and seeking appropriate professional advice on the tax consequences.

Reputational risk

This is the non-financial risk that tax may have an impact on the Company’s relationships with shareholders, clients, tax authorities and the general public. 

The Company aims to manage tax risk in a similar way to any area of operational risk.  The primary oversight functions are Company Tax and Company Internal Audit.

Where appropriate, the Company seeks to engage with tax authorities to disclose and resolve issues, risks and uncertain tax positions.  The subjective nature of global tax legislation means that it is often not possible to mitigate all known tax risks and therefore, at any given time, the Company may be exposed to financial and reputational risks arising from its tax affairs

Attitude of the Company to Tax Planning

The Company endeavors to structure its affairs in a tax efficient manner where there is strong commercial merit, ensuring compliance with applicable laws and regulations, in a manner which does not adversely impact our reputation as a responsible taxpayer.

The Company will seek professional advice on any potential tax planning opportunities, including structural changes, to maximize shareholder value.

Significant tax planning opportunities are to be assessed and approved by the Board or appropriate committee before the Company can implement them.  The Company will also seek advance clearance of key transactions and significant structural changes from the relevant local tax authority as appropriate.

Level of risk in relation to taxation that the Company is prepared to accept

The Company’s tax risk appetite requires that, where tax law is unclear or subject to interpretation, its adopted tax position is at least more likely than not to be allowable under applicable tax laws.

Approach towards dealings with tax authorities

The Company is committed to having an open, honest and positive working relationship with tax authorities, ensuring prompt disclosure and transparency in all tax matters. We strive to resolve any areas of dispute with the tax authorities, adopting a real time working approach, and improving mutual trust.

External advisers

At both Company and local subsidiary level there is a strong level of engagement with local professional tax advisers and the Company will take appropriate advice from reputable professional firms to perform the following:

• Assist with legitimate tax planning opportunities;

• Review material transactions; and

• Review corporation tax submissions.