GOVERNANCEANDMANAGEMENT• 37
TAXRISKS
Changes in the distribution of theGroup’s profit couldhave significant impact on theGroup’s consolidated tax payments.
Description
Status
Due to significant differences in tax rates betweenGroup
entities, a change in the distribution of theGroup’s profit
could have significant impact on theGroup’s consolidated
tax payments.
The riskmainly relates to differences in corporate
taxation inDenmark andThailand. Corporate income tax
inDenmark is 24.5% (gradually to be reduced to 22%by
2016) while PANDORAProductionCo. Ltd. is currently
subject to a BOI agreement that significantly reduces the
corporate tax rate inThailand (many types of income are
free from taxation, while other types are subject to taxation
at 20%).
Wemaintain an ongoing dialoguewith tax authorities,
including theDanish andThai authorities, with regard to the
computation of taxable income. InManagement’s opinion,
the tax recognised reflects themost likely amount required
to settle the present obligation, including potential tax cases.
