FISCAL TRANSPARENCY

COMER INDUSTRIES’ FISCAL APPROACH

Comer Industries operates through 9 Companies: two in Italy, two in China and one in India, the United States, Brazil, Germany and the United Kingdom. Revenues are generated 46% in Europe, 28% in Pacific Asia, 22% in North America and the remaining part in Latin America.

As a multinational group, Comer Industries contributes to the economies of the various countries in which it operates. The economic contribution in the various countries where Comer Industries is present is also expressed at a fiscal level and takes the form of various types of taxes, which can be grouped into the following categories: • income tax, corporate profits tax; • property taxes, collections on property, sale or lease of real estate; • employment taxes, including taxes collected and paid to the tax authorities on behalf of employees; • indirect taxes collected on the turnover and production and consumption of goods and services such as VAT, customs duties, etc; • local taxes related to corporate social responsibility.

According to its Code of Ethics, Comer Industries is committed to operating in each of its entities with honesty and integrity in all tax matters and with a transparent and sustainable long-term tax approach. Comer Industries is committed to complying with legislation in all jurisdictions in which it operates, working closely with tax authorities, tax advisors and auditors to ensure that taxes due are paid.

TAX PLANNING

Comer Industries makes its best efforts to ensure that the Group’s tax affairs are managed in the most efficient manner, in compliance with applicable tax regulations, through a conservative approach to tax planning consistent with the principles set forth in the Code of Ethics. No tax planning strategies are pursued and no artificial schemes without economic sense are used in order to achieve tax savings. The implementation of behaviors and operations, whether domestic or cross-border, that result in constructions of pure trickery, that do not reflect economic reality and from which it is reasonable to expect undue tax advantages is rejected.

Intra-group transactions are governed, for tax purposes, on the basis of the arm’s length principle, as defined by the OECD (Model Tax Convention and Transfer Pricing Guidelines), with the aim of aligning transfer conditions and prices as correctly as possible with the places where value is created within the Group.

FISCAL RISK MANAGEMENT

Reasonable and well-founded tax choices and interpretations are adopted in determining the tax treatment of a particular transaction or activity. On the basis of the size and complexity of the Group’s business, risks may arise in relation to the interpretation of local tax regulations. These risks are identified and analyzed internally and with the support of tax advisors.

RELATIONS WITH THE TAX AUTHORITIES

Comer Industries guarantees transparency and fairness in its relations with the tax authorities, aiming to build and maintain open and fruitful relations with all competent tax authorities and to resolve any dispute in a spirit of cooperation. In cases of particular uncertainty about the tax treatment applicable to relevant issues, the tools to know in advance the position of the competent tax authority are used.

CHAPTER 4 ECONOMIC sustain ability