Tax strategy

GRI 207‑1

Approach to taxation

Nornickel strictly complies with all applicable tax laws of the Russian Federation and other countries of operationThe Group’s foreign entities interpret applicable tax legislation and resolve controversial tax issues independently., while also paying taxes and making other statutory budget payments in a full and timely manner.

The Tax Strategy Policy of Nornickel Group is the key document governing all taxation aspects, including operations of the tax function of MMC Norilsk Nickel and its subsidiaries and management of tax burden and risks.

Nornickel is committed to openness and transparency in its taxation aspects. The Company discloses relevant information for stakeholders on its corporate portal and takes a zero‑tolerance approach to non‑transparent corporate structures used for tax avoidance.

Group companies use market prices in their reports on intra‑group transactions submitted for tax purposes. In line with the applicable transfer pricing laws, the Group complies with the basic principles set out in the Organisation for Economic Cooperation and Development (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations and follows the laws and regulations of Russia and other countries of operation.

Nornickel takes a conservative approach to all controversial tax issues arising in all jurisdictions across the Group's footprint. The Group considers unacceptable any use of aggressive tax planning schemes.

Tax management at Norilsk Nickel Group

GRI 2‑9, 2‑12, 2‑13, 207‑2

The tax strategy is developed and monitored by the Head of the Tax Department, who reports to Nornickel’s Senior Vice President and CFO. The Company's Management Board approves the tax strategy and critical amendments made to the strategy from time to time.

The Tax Department prepares and communicates internal regulations (guidelines, explanations, information mails) based on the current legislation, arbitration practice, regulatory clarifications and other circumstances. If necessary, the Tax Department requests specific clarifications from competent authorities or a reasoned opinion of the tax authority required for the companies participating in tax monitoring.

Additionally, the Tax Department is responsible for managing the tax risks of the Group's Russian entities. Tax reassessment and penalty cost risk factors, contingent tax liabilities, and the opinion of an external auditor confirming the accuracy of tax information are presented in the Consolidated Statements of the Company for 2023.

Cooperation with tax authorities

GRI 207‑3

The areas where the Group interacts with tax authorities include:

exercising tax control;

seeking clarifications on existing legislation;

entering into pricing agreements.

Nornickel regularly interacts with tax authorities in the real‑time mode through a tax monitoring system, which provides access to the Company's tax and accounting data.

In 2023, the tax monitoring platform evolved in terms of penetration within the Group, while also improving the user friendliness of its interface, data quality and information exchange speed. This tool proves high automation of reporting and transparency of tax processes.