PHINIA UK Group Tax Strategy

This tax strategy has been prepared in accordance with paragraph 16 (2), Schedule 19, FA 2016, and will remain in effect until such a time as any amendments are approved and published. This strategy applies from the date of publication until it is superseded.

References to ‘UK Taxation’ are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax, Stamp Duty Land Tax, Customs Duties and Excise Duties.

Specific HMRC requirements for a published tax strategy

The Finance Act 2016 requires the published tax strategy to cover four specific requirements:

the approach to risk management and governance arrangements in relation to UK taxation.
the attitude of the group towards tax planning (as far as affecting UK taxation).
the level of risk in relation to UK taxation that the group is prepared to accept.
the approach towards its dealings with His Majesty’s Revenue & Customs (“HMRC”).

PHINIA considers that the above items are all satisfactorily addressed in this document and is compliant with its duty under paragraph 19(4) Schedule 19 FA 2016.

PHINIA Inc., the ultimate parent company of the PHINIA Group has the following wholly owned UK subsidiaries to which this strategy applies:

PHINIA Holdings Jersey Limited*, PHINIA Holding & Financing UK Limited, PHINIA Management UK Limited, Delphi Technologies Malta Holdings Limited*, PHINIA Kingway Financing LLC*, PHINIA Delphi Pension Trustees Ltd, PHINIA Financial Operations UK Limited, PHINIA Financial Services APAC Limited, PHINIA Financial Services UK Limited, PHINIA Holdings UK Limited, PHINIA Delphi UK Limited and Hartridge Limited.

*non-resident companies that are UK tax resident only

Guiding Principles

The principles that guide PHINIA’s approach to taxes are as follows:

To build relationships with taxing authorities based on integrity, openness, and honesty, and to seek to clarify and agree material tax positions in advance with taxing authorities where possible, practical, and efficient.
To comply with all relevant tax laws, regulations, and reporting requirements in all the jurisdictions in which PHINIA operates, including the OECD’s arm’s length principle and to timely pay the right amount of tax in each jurisdiction.
To team effectively with PHINIA’s operations to appropriately manage the tax cost of conducting business and to only undertake transactions that align with operational and business objectives.
To manage our tax affairs in line with PHINIA’s Code of Ethical Conduct.
To constructively engage with governments and tax authorities to support the development of tax policy and law in the interests of all our stakeholders.
To continuously develop and enhance the professional experience of our tax team and to continuously review our tax positions considering changing tax laws and guidance.
Given the complicated nature of global tax laws and the inherent subjectivity of tax rules, to seek the support of external advisors on material tax matters.
To control and manage tax risk and the reputation of PHINIA through appropriate policies, procedures, and communication.

Risk Management & Governance

PHINIA Inc. is a US company listed on the New York Stock Exchange and subject to various governance requirements, including those stated by the US Securities & Exchange Commission. Accordingly, PHINIA Inc. has established and continuously reviews and updates a robust set of governance policies and procedures to effectively manage risk, including UK tax risk.

PHINIA’s policies are set by its Policy Committee, and each functional manager owns key policies for their area with oversight for the global tax function and implementation of tax-related policies and procedures, led by PHINIA’s Vice President, Tax.

Tax matters in the UK are managed by designated Senior Accounting Officers, with assistance from the Vice President, Tax.

When appropriate, we complement our network with external advisors to accurately identify, measure, manage and report tax risks. External advice is sought should in-house tax staff need assistance with interpretation of complex tax law.

Tax Planning and Risk Attitude

We only engage in transactions that are consistent with and support our broader operational and business objectives and activities in a manner that provides value while appropriately minimising our consolidated tax risks and liabilities.

Our policies and governance framework operate to maintain compliance with tax laws and regulations in all jurisdictions in which we operate and to ensure that tax risks are identified and mitigated.

We have a low tolerance for tax risk and strive to obtain certainty where possible for our financial reporting obligations and to prevent any potential negative impacts to our shareholders and PHINIA’s reputation.

We do not engage in artificial tax arrangements, i.e., planning that is not underpinned by commercial and economic substance. Tax planning measures are always in line with the tax legislation with a minimal risk of non-acceptance by Tax Authorities.

We are subject to consolidated accounting requirements in the US and standalone accounting requirements in every jurisdiction we operate that require us to assess and account for tax risk on either a quarterly and/or annual basis.

Relationship with the UK tax authorities

PHINIA is committed to engaging with HMRC with honesty, integrity, respect, and fairness and in a spirit of co-operative compliance. We believe we have a transparent and open relationship with HMRC and will cooperate, to the extent possible, on a real time basis.

Where appropriate, PHINIA will take part in consultations with HMRC to assist in the shaping of future legislation and tax policy.

All information requests from HMRC, whether through a formal enquiry or otherwise, are processed in as timely a manner as possible to ensure information provided is accurate and complete.

We will, to the extent possible, discuss material tax issues with HMRC in advance where we consider that the tax treatment proposed by PHINIA may not be agreed by HMRC. This could be via scheduled meetings, written direction or periodically throughout the year if considered more appropriate.

To ensure consistency of approach, all dealings with HMRC are where possible dealt with through local management with Group Tax support but on occasions, contact with HMRC is required to be made by others and this should always be with the full knowledge of Group Tax. The above approach is also extended to other Government Agencies and, where appropriate, overseas fiscal authorities.

PHINIA expects an equal degree of professionalism and mutual respect from HMRC in all dealings with them.