Background: For 150 years, General Mills has been making food people love while investing to make the world around us better. We believe that being successful in the marketplace and being a force for good go hand in hand. Although a substantial majority of our business is in the U.S., our presence in Europe, Asia, and Latin America continues to grow. General Mills contributes to society through various taxes such as corporate income taxes, duties, payroll taxes, and also indirectly through VAT levied on the products sold to consumers. All taxes are paid according to the laws and regulations in the countries where we operate. General Mills sees tax as an important part of its corporate social responsibility.
Tax Compliance and Governance: Tax compliance and governance begins with our global tax department, which is headquartered in the U.S., with teams in Europe and Asia, and is staffed with experienced, professionally certified practitioners (e.g., accountants, attorneys, and paraprofessionals). In addition to global responsibility for tax planning and audit representation, the General Mills Tax Department (“Tax”) is responsible for tax-related regulatory compliance and financial reporting.
General Mills is a publicly traded corporation registered in the U.S., and must therefore comply with reporting requirements of the U.S. Securities and Exchange Commission. Consequently, an independent accounting firm audits our financial statements annually, including all of the tax accounts and disclosures. Additionally, our internal audit group reviews our processes and controls, with emphasis on enterprise risk management. Finally, Tax leadership provides annual updates to the Audit Committee of the Board of Directors, which entails a review of global tax developments and Tax policies and practices.
Our Approach to Tax: We have a fiduciary responsibility to optimize shareholder return while operating in a responsible and sustainable manner, following our corporate value of “doing the right thing…always”. Our general view is that income and profits should be taxed where the value is created in accordance with the OECD guidelines. As a result, any significant tax planning initiated by General Mills is carefully considered by Tax and, in addition to the reviews and controls mentioned above, is:
- Consistent with business operations and priorities;
- Supported by economic substance and business purpose; and
- Supported by arms-length pricing, updated and documented annually, on any intercompany, cross-border transactions.
Because the U.K. is one of our major international markets, U.K. tax law developments and compliance are a major responsibility of our tax team in Europe which works very closely with the finance team in the U.K.
Engagement of External Consultants and Working with HMRC: External consultants are engaged for advice in situations involving significant complexity in the tax law where we lack the necessary in-house expertise and resources; we rely on consulting firms as much for compliance as for tax planning and audit representation.
Our U.K. affiliates are periodically audited by HMRC and in all cases the audits have been concluded efficiently and cordially. We look forward to working with HMRC and other tax authorities as we enter a new era of tax transparency with the OECD BEPS country-by-country reporting regime.
Transparency: At General Mills, our commitment to transparency extends beyond our food and processes. General Mills supports the OECD initiatives to provide additional tax transparency to stakeholders and the community. We believe transparency is key to our sustainability engagement, which focusses on real accountability for issues affecting the community, the environment, and consumer wellbeing.