UK Tax Strategy

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Background

In accordance with Schedule 19 Finance Act 2016, this document sets forth the UK Tax Strategy for the year ended December 31, 2022, with respect to the UK subsidiaries of WESCO International, Inc. (“Wesco” or the “Company”), including WESCO Distribution International Limited, TVC UK Holdings Limited, Anixter, Ltd., Anixter UK Ltd., and Infast Group Ltd. (collectively the “Wesco UK Group”). This strategy applies from the date of publication until it is superseded. This document addresses the following elements of the Wesco UK Group’s tax strategy:

  1. Approach to risk management and governance arrangements in relation to UK taxation;
  2. Attitude of the business towards tax planning as it affects UK taxation;
  3. Level of risk in relation to UK taxation that the business is prepared to accept, and;
  4. Approach of the business towards its dealings with HM Revenue & Customs (“HMRC”).

 

Governance and Risk Management

Wesco’s Code of Business Ethics and Conduct (the “Code”) (available at http://wesco.investorroom.com/guidelines-charters-and-policies) sets out the standards of behavior which every Wesco director and employee must follow. The Code requires every person within its scope to comply with all applicable laws, regulations and Company policies and to conduct business in keeping with high moral, legal, ethical and financial reporting standards. Every person subject to the Code must certify their compliance with its requirements annually. The Code applies to all aspects of Wesco’s business, including tax matters.

Wesco’s Board of Directors (the “Board”) through its Audit Committee is ultimately responsible for establishing overall tax governance. The Board delegates executive management of Wesco’s global business to the Executive Committee (the “EC”). The Executive Vice President and Chief Financial Officer (the “CFO”) is the EC member with executive responsibility for the global finance function, including taxes. The Senior Vice President, Tax (the “SVP Tax”) reports to the CFO and heads the corporate tax function. The SVP Tax has responsibility for day-to-day oversight of the Company’s global tax affairs. The Senior Director, Global Tax, reports to the SVP Tax and has responsibility for the day-to-day oversight and management of the Company’s international tax matters globally. The Director, International Tax (EMEA & APAC) reports to the Senior Director, Global Tax and has responsibility for day-to-day oversight of the Wesco UK Group’s tax affairs.

Our governance processes require that management provide periodic enterprise-wide risk assessments, including in the area of tax, to the Board so that the Board can assess the material risks facing the Company and the appropriateness of the risk mitigation actions taken by management. Additionally, the SVP Tax reports to the Audit Committee and the CFO on a regular basis concerning any material ongoing tax matters and risks, including as they might apply to the Wesco UK Group.

The Board, EC, CFO, and SVP Tax have responsibility to ensure that taxes are considered in all material business decisions so that the Company can appropriately identify and mitigate tax risks and ensure that it meets applicable tax compliance requirements. In carrying out this responsibility, the corporate tax department will engage external tax advisers to aid in assessing and mitigating tax risks where warranted. The corporate tax department is responsible for ensuring there are processes and controls in place, including those pursuant to the Sarbanes-Oxley Act of 2002, to file and pay Wesco’s business tax obligations timely and accurately, including with respect to the Wesco UK Group.

Tax Compliance & Planning

The Wesco UK Group seeks to comply with all applicable UK tax laws and regulations in carrying out its business. The governance and risk management environment outlined above is intended to ensure such compliance. In addition, policies, procedures, and controls implemented at the local level are also intended to ensure such compliance. When entering into commercial transactions, the Wesco UK Group will seek to legitimately reduce its overall tax burden, including taking advantage of available tax incentives, reliefs, and exemptions consistent with the spirit and intention of the UK tax laws, in order to obtain a tax-efficient business structure. The Wesco UK Group does not undertake tax planning unrelated to such commercial transactions. The Wesco UK Group adheres to the OECD arm’s length principle in transfer pricing matters.

Level of Risk

When taking a tax position, the Wesco UK Group seeks to achieve certainty as to the eventual outcome of the tax position and in so doing will utilize all effective and practical pre-filing administrative options to achieve certainty. However, due to the inherent complexity of the tax law and its sometimes varied and uncertain application to specific facts and circumstances, uncertainty as to the eventual outcome of the tax position upon review by HMRC may exist. Where uncertainty exists, the Wesco UK Group will seek to ensure that, in its reasoned view, the tax position taken is at least more-likely-than-not to be sustained on its technical merits, if challenged by HMRC. Wesco UK will not take any tax position that, in its reasoned view, is not at least more-likely-than-not to be sustained on its technical merits, if challenged by HMRC. Where necessary in management’s judgment, the Wesco UK Group will obtain the advice of competent external tax advisers in evaluating and concluding upon the level of risk inherent in a tax position.

Relationship with HMRC

In keeping with our Code, the Wesco UK Group and its representatives will deal honestly with HMRC and seek to establish a relationship with HMRC that is built upon transparency, trust, and cooperation. When submitting tax computations and returns, the Wesco UK Group will disclose all relevant facts and information in compliance with applicable requirements. When dealing with HMRC’s representatives, the Wesco UK Group will ensure that its employees and representatives respond promptly, fully, and professionally. In so doing, it is our goal to avoid any disputes with HMRC about the proper application of any provision(s) of the UK tax law to the Wesco UK Group. However, should a dispute arise due to the inherent complexity of the UK tax law and its application to the Wesco UK Group’s particular facts and circumstances, it is our desire to resolve any such matter promptly and on the basis of mutual agreement.

Approved for publication by the Audit Committee of the Board of Directors of WESCO International, Inc., and the Boards of Directors of the Wesco UK Group companies.

 

December 7, 2022