Fiscal transparency

At Inditex, stringent compliance with our tax obligations is imperative in all our business markets. We view the application of best practices in taxation as an extension of our sustainability and corporate social responsibility commitments. It also fits with our value creation philosophy and our determination to forge positive social transformation wherever we do business, because the payment of taxes, as a company and as individuals, paves the way for economic and social development at the community level.

Inditex’s tax management strategy is based on upholding best practices in each jurisdiction.

The Inditex Group is vertically integrated. It is active in every step of the garment industry value chain (design, manufacturing, sourcing, distribution and sale). The fact that its activities are conducted in different territories makes it necessary to determine which portion of the profits generated along the value chain is attributable to each. That appropriation of earnings is conducted on an arm’s length basis, in keeping with local legislation and in line with the OECD’s Guidelines on transfer pricing.

The Group has pledged not to use opaque structures for taxation purposes or special purpose vehicles located in territories classified as tax havens or non-cooperative jurisdictions by the Spanish tax authorities. More specifically, the creation of special purpose vehicles in territories classified as tax havens by the Spanish authorities is limited to cases in which so doing is strictly necessary for the Group’s business activities, as is the case with the companies that operate the stores located in Macao SAR and Monaco.