Tax Strategy

Our purpose

We are here to enable economic growth and societal progress by generating positive impact for our clients, our people, our investors and our communities.

We achieve this by being a leading European bank with a global reach. We value our German roots and remain committed to our international presence.

We serve stakeholders best by creating value for our clients by offering them solutions and participating in value creation by them. In doing so, we seek to ensure that our bank is competitive and profitable while being underpinned by strong capital and liquidity. We are committed to a culture that appropriately aligns risks and rewards.

To deliver this we aim to attract and develop talented individuals. We foster teamwork, partnership and inclusion, trusting that each of us will deliver to the expected standards.

In keeping with this purpose, we apply the principles set out in this document in the management of our tax affairs. These tax principles, which have been embedded in the bank’s control framework for a number of years, have been approved by our Management Board and apply to all our businesses and group entities.

The key principles are:

  • We undertake our tax affairs on a basis which generates sustainable value while meeting applicable legal and regulatory tax requirements.
  • We give due regard to the intent and spirit of tax laws, the social context within which the bank operates, and the bank’s standing and reputation with the public, tax administrations, regulators, and political representatives.

Approach to tax risk management and governance

We operate a Three Lines of Defence risk management model, in which risk, control and reporting responsibilities are defined. The 1st Line of Defence refers to those roles in the bank whose activities generate risks, whether financial or non-financial. The 2nd Line of Defence refers to the risk type controller roles in the bank who facilitate the implementation of a sound risk management framework throughout the organisation. The 2nd Line of Defence defines the risk appetite and risk management and control standards for their risk type, and independently oversees and challenges the risk taking and risk management activities of the 1st Line of Defence. The 3rd Line of Defence is Group Audit, which is accountable for providing independent and objective assurance on the adequacy of the design and effectiveness of the systems of internal control and risk management.

The Three Lines of Defence approach and its underlying principles apply to all levels of the organisation, including group-level, regions, countries, and legal entities.

Based on this model we have a clear framework setting out roles and responsibilities for defined tax types to ensure we remain compliant with our tax obligations.

Attitude towards tax planning

We manage our tax affairs in a way which aims to ensure that the tax consequences of business operations are appropriately aligned with the economic, regulatory and commercial consequences of those business operations, with due regard being given to the potential perspective of the relevant tax authorities.

In conducting our business affairs, setting up and structuring our business operations and commercial activities, we consider – among other factors – the tax requirements of the respective jurisdictions in which we operate, with a view to generating sustainable value to Deutsche Bank and its shareholders. In this context we may seek to avail ourselves of tax benefits and beneficial tax rates available under those tax laws.

We have an in-house Group Tax function, which is an independent risk and control function separate to our business divisions, and we employ skilled professionals to ensure that our position with respect to the bank’s own tax matters is robust. In appropriate situations our internal experts may take specialist external tax advice.

Level of risk

Our business is subject to various risks, including tax-related risks. We seek to understand and mitigate these risks where possible. A number of tax-related risks are an inherent consequence of the scale and diversity of our business activities and the international nature of our business. This is exacerbated by the growing complexity of international tax laws and divergent approach of national tax authorities in various instances.

In accordance with our principles, we operate a control framework and governance to ensure, in all material aspects, we are compliant with applicable tax laws, file accurate tax returns, and pay the amount of tax due.

Relationships with tax authorities

We aim for our dealings with tax authorities to be undertaken in a proactive, transparent, professional, courteous, and timely manner. We seek to develop and foster good working relationships with tax authorities.

In 2010 we were among the first banks in the United Kingdom to adopt the UK Code of Practice on Taxation for Banks.

Preventing tax evasion

Tax evasion is illegal and goes against our culture, values and beliefs and our policies strictly prohibit aiding or abetting tax evasion.

We advocate the development of sound regulations and internal procedures to combat financial crime, including tax evasion. These requirements are also intended to prevent our bank from committing or facilitating – intentionally or negligently – criminal offences.

We are prepared to discontinue, and have discontinued, relationships with clients in order to safeguard our bank against the risk of tax evasion or other forms of financial crime.

 

We consider that the above statement complies with Deutsche Bank AG’s obligations under paragraph 16(2) of schedule 19 of the UK Finance Act 2016 to publish a tax strategy for 2019.

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