Taxation

Providing NXP taxation principles, approach, governance and engagements applied across our geographic operational footprint.

Overview
Tax Strategy
Governance
Risk Assessment and Mitigation
Engagement

Overview

We comply with all applicable tax laws
We align our profit allocation with international tax policies
We use tax incentives to directly support innovation and research and development (R&D)

We have zero tolerance for tax evasion
We have no presence in countries in the EU's list of non-cooperative jurisdictions
We are open and transparent with tax authorities

Tax Strategy

Since our founding as a company, NXP has applied a tax strategy that is sustainable, transparent and fully aligned with well-known and widely recognized international tax principles. NXP aims to support stable, transparent and predictable tax systems that incentivize long-term investments and economic growth. NXP’s tax structures are based on global standards and frameworks supported by the Organization for Economic Cooperation and Development (OECD).

Governance

Within NXP, the tax department is led by a Senior Vice President (SVP), reporting directly to the Chief Financial Officer (CFO). The CFO is responsible for updating the Audit Committee of the Board of Directors on a regular basis, with support from the tax-department leadership. NXP reviews and approves tax plans and targets annually, consistent with industry-wide, best-in-class control and governance frameworks.

The NXP tax department is a centralized organization that manages both regional and functional requirements. The organization regularly engages with external tax advisors and/or local tax authorities to provide assurances that our tax obligations are properly, effectively, and correctly handled and disclosed in the annual and quarterly reports.

Risk Assessment and Mitigation

NXP operates on a global basis and is potentially exposed to numerous risks, including those related to taxation. The risks include, but are not limited to:

Unfavorable changes in the respective tax laws and regulations to which NXP is subject
Interpretation of tax law or regulations
Conclusion or amendment of existing tax treaties by regional tax administrations
Unpredictable variation in foreign exchange rates and possible geopolitical conflicts, including the increase of barriers to international trade

When evaluating the acceptable risk limits for taxes, we apply critical and professional reasoning on an issue-by-issue basis. NXP’s Tax Team applies critical and professional reasoning on an issue-by-issue basis to balance the acceptable risk limits as they relate to taxes. In addition, to support transparent financial reporting, NXP follows Generally Accepted Accounting Principles (GAAP), and has implemented a robust, effective and efficient tax-accounting control framework that assures compliance with the US 2002 Sarbanes-Oxley Act (SOX).

SpeakUp

Potential violations of NXP’s Tax Policy can be confidentially reported using various reporting channels, such as management, an ethics liaison or the NXP Ethics Committee, or can be submitted using the phone or web option of our SpeakUp line, a system hosted by an independent third party that facilitates anonymous reporting. A strict policy of non-retaliation is in force to protect any team member who reports potential violations.

Engagement

NXP is committed to open and transparent relationships with tax authorities, grounded on ethical integrity, collaboration and mutual respect. NXP participates in:

The European Business Tax Forum (EBTF)
Annual Total Tax Contribution Project
Feedback and insights to governments, international organizations and tax advisors

Contact Us

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