L'Oréal shares its commitment to combating corruption with its business partners. Compliance with the law is included in the Group's general terms of purchase, general terms of sale and the Mutual Ethical Commitment Letter. The integrity and reputational risks associated with the management of influencers are managed through robust selection processes and the signing of the Group's Influencer Value Charter. L'Oréal reserves the right to end any relationships with business partners who fail to comply with regulations.
L'Oréal was recognised for the 15th time as one of the "World's Most Ethical Companies" by the Ethisphere Institute.
L'Oréal considers that taxation is an integral part of its Corporate Social Responsibility and constitutes a way to participate positively to the development of the countries in which the Group operates.
The Group's tax policy forms part of the sustainability of its business. It is based on three pillars, which are defined in the Internal Tax Charter prepared and distributed around the world: Compliance, Transparency and Legitimacy.
L'Oréal completes its tax declarations and pays its taxes by the deadlines in compliance with the letter and spirit of the laws and regulations in the countries in which the Group operates.
Special vigilance is required on compliance with the rules related to the fight against tax fraud and tax avoidance.
L'Oréal is located in countries where it conducts a real operational and commercial activity. If applicable, the Group's presence in certain so-called tax havens(1) is justified for operational reasons and the development of its activity, and not for tax purposes.
L'Oréal ensures that transactions between Group companies are carried out in compliance with the arm's length principle defined by the OECD and the UN and satisfies increasingly digitalised reporting obligations (transfer pricing documentation, country-by-country reporting, etc.).
L'Oréal aims for excellence in tax compliance.
L'Oréal establishes and maintains relations with Tax and Customs Authorities based on transparency, pursuant to the Group's "zero tolerance" rule on corruption.
L'Oréal also develops a constructive relationship with Tax and Customs Authorities, a relationship based on the principles of cooperation and mutual respect. L'Oréal responds appropriately and promptly to requests from the tax authorities regarding the exchange of information, in compliance with tax conventions.
Where permitted to do so by governments, L'Oréal joins the cooperative compliance programmes launched by the tax authorities, such as the "relation de confiance" with the French tax authorities.
The Group may contribute to the analysis of legislative changes at the request of Tax and Customs Authorities or professional associations involved. Consequently, the Group takes part in OECD working groups relating to Pillars 1 and 2.
L'Oréal considers global challenges and standards in terms of tax transparency. In particular, it adheres to the reporting recommendations of the Global Reporting Initiative (GRI) and, more specifically, standards GRI 207-1, GRI 207-2 and GRI 207-3. Documents relating to the Group's ESG performance, including the GRI standards, are published on our website(2).
L'Oréal is also a member of the European Business Tax Forum (EBTF), a European business association that seeks to increase transparency in the tax debate.
The Group has a Speak Up programme for L'Oréal's internal and external stakeholders to express any serious concerns they have, so that the Group and the Ethics Department can address them.
The Group is careful to ensure that its behaviour in tax matters is beyond reproach, in compliance with the fundamental principles of the Code of Ethics.
L'Oréal legitimately applies the most relevant tax treatment, in accordance with economic reality and operational objectives, in compliance with the letter and spirit of the laws in force. The Group does not pursue an aggressive tax policy through artificial structures or transactions that have no economic or commercial substance and whose purpose would be strictly fiscal.
In an evolving international tax environment, the positions taken by the Group may be questioned and subject to tax and customs audits by local authorities. If there is disagreement with a Tax or Customs Authority, L'Oréal is able to legitimately defend its interpretation of the law, prove its good faith and, as needed, bring the disputes to court.
A regular review of tax risks, carried out by the Group's Tax Department in contact with the local financial teams, enables the risks to be assessed, resulting, if applicable, to the recognition of a provision. The main risks are reported to General Management and to the Audit Committee.
