Tax Management Policy

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Review History

Version: Date of Review: History: 
1 05/15/2015 Document Elaboration.
2 05/06/2016 Update of items Purpose (I), Additional Documentation (VI), Concepts and Acronyms (VII), Responsibilities (V), Guidelines (III) and Outcome Management (IV). Inclusion of item Miscellaneous (VIII).
3 05/08/2018 Change of title from “Tax” to “Tax Management”; Update of the entire content of the policy pursuant to the Company’s current practices.
4 04/23/2020 Updating Items I. Purpose, II. Scope; III. Guidelines – Subitems 2.1, 3.1, 3.1.1, 3.1.2, 3.3; IV. Management of Consequences and VI. Additional Documents.
Excluding Subitems 1.3 and 3.2.3.
5 20/04/2022 Update of items: I. Purpose, II. Scope, III. Guidelines subitens 1.1, 1.2, 1.3, 2.1, 2.1.4, 3.1.5, 3.3.2, IV. Consequence Management, V. Responsibilities, VI. Supplementary Documentation, VII.
Concepts and Acronyms and VIII. General Provisions.
6 03/27/2024 Update of items: II. Scope, III. Guidelines of sub-items 1.1, 1.2, 2.1.4, 2.1.5, 2.1.6, 2.1.7, 3.1.4, 3.1.6, 3.1.8, 3.2.3, 4.2, IV. Consequence Management, V. Responsibilities, VII. Concepts and Acronyms and VIII. General Provisions.

 

I. Purpose

This Tax Management Policy (“Policy”) aims to ensure that the tax management and strategy adopted by the Company comply with the legislation in force, mainly through the adoption of the most appropriate and efficient tax treatment for the provision of services, other events and transactions carried out, based on corporate values and principles, in the exercise of responsibility towards public entities and in contributing to the country’s socioeconomic growth.

II. Scope

All members of the Board of Directors and the Executive Board (“Directors”); members of the Advisory Committees and the Fiscal Council; employees, including outsourced workers, interns and young apprentices (“Employees”) of the companies Cielo S. A. – Instituição Pagamento (“Cielo”), Servinet Serviços Ltda. A. – Instituição de Pagamento (“Cielo”), Servinet Serviços Ltda. (“Servinet”), Aliança Pagamentos e Participações Ltda. (“Aliança”) and Stelo S.A. (“Stelo”), hereinafter jointly referred to as the “Company”.

All the Company’s Subsidiaries must define their directions based on the guidelines set forth in this Policy, considering the specific needs and the legal and regulatory aspects to which they are subject.

With respect to the Affiliated Companies, the Company’s representatives who act in managing its Affiliated Companies must make every effort to define their directions based on the guidelines set forth in this Policy, considering the specific needs and the legal and regulatory aspects to which they are subject.

III. Guidelines

1. Initial Provisions

1.1. The Company acts as a generator of jobs, stimulating economic and social development, and interacting with the community and authorities of the countries where it operates. In addition, the Company recognizes its responsibility towards public tax entities, applicable from the appropriate and efficient treatment of tax practices to the timely payment of taxes and fulfillment of ancillary obligations, always seeking to ensure compliance with the current tax legislation and regulations.

1.2. The Company monitors the Brazilian and global tax scenario in search of fiscal efficiency, following a sustainable policy that represents the security of business continuity, according to strategies previously defined by the Company, always under strict legal compliance. In addition, the strategies adopted by the Company take into account the mitigation of risks to its reputation and the preservation of the brand.

1.3. All of the Company’s actions seek transparency, clarity, order and consistency, and it is aware of its responsibility towards shareholders, employees, customers, suppliers, consumers and other stakeholders.

2. Pillars

2.1. This Policy is based on the following pillars, also set out in the Company’s Code of Ethics:

2.1.1. Ethics: “Ethics in all relationships” is one of the Company’s values. The precepts of ethical conduct are established in the Code of Ethics that defines the behaviors expected from employees, including with regard to the relationship with tax authorities.

2.1.2. Integrity and good faith: all functions performed within the scope of this Policy will be done so with integrity and honesty, with due diligence and care.

2.1.3. Legality: guarantee of compliance with the law, the Company’s Bylaws and all of its rules and policies. Thus, the payment of taxes must be carried out in accordance with the current tax laws.

2.1.4. Corporate Responsibility and Citizenship: the Company recognizes the social and economic importance of paying taxes to society and diligently fulfills its tax obligations in accordance with applicable laws. The company refrains from employing illegal tax strategies or implementing artificial structures to diminish its tax liabilities. Moreover, it does not offer clients incentives that conflict with tax laws, consistently striving to uphold its role as a responsible corporate citizen and taxpayer within the country.

2.1.5. Transparency: the Company encourages transparency and dialogue throughout its value chain, including with regard to criteria, calculations and payment of taxes. In search of transparency of the tax strategy, the Company discloses, on a quarterly basis, tax issues that significantly impact the accounting statements of the Company and its subsidiaries. Among the information disclosed are the new tax approaches, details on the tax impacts, operating revenues and profits, and the statements of effective rates, always considering the best accounting practices and standards required by IFRS and COSIF.

2.1.6. Reputation: the Company ensures its reputation before the tax and administrative authorities, keeping open and constructive dialogue, by providing information on the facts and circumstances whenever required by the authorities. In addition, all adopted strategies should take into account the following requirements: (i) low risk to the company’s reputation; and (ii) preserving brand value. Thus, the Company invests in the valorization of its brand and image in the national and international markets, always seeking to adopt the best tax practices, aiming at maintaining its reputation with the stakeholders and the Company’s sustainability.

2.1.7. Governance: tax matters relevant to the Company, whether concerning financial risk or brand exposure, are raised to the attention of the company’s Board of Directors and/or Advisory Committees. These bodies oversee and supervise the management of the Executive Board, making decisions on significant business matters, including strategic planning. They also ensure long-term shareholder relations while considering the interests of stakeholders.

3. Tax Strategies

3.1. Tax Management and Mitigation of Tax Risks

3.1.1. To make a prudent and logical interpretation of tax legislation, seeking to implement them as intended by the legislator and taking into account the prevailing jurisprudence, according to the economic, political and social context, aimed at mitigating the legal tax risks.

3.1.2. Ensure the proper payment of taxes and timely delivery of ancillary obligations, avoiding the incidence of penalties and the accumulation of tax liabilities.

3.1.3. Establish internal controls that ensure that the information used in tax administration is reliable, complete, current and auditable.

3.1.4. Execute tax strategies that respect the law and good business practices, such as the use of tax benefits granted by law, which do not represent legal and/or financial risk, as well as risk to the Company’s reputation.

3.1.5. Actively seek to identify, control and monitor any risks arising from the complexity of the interpretation of tax legislation, ensuring adequate tax treatment and alignment with the Company’s values.

3.1.6. The relationship with stakeholder must be based on good business and tax practices, discarding artificial structures, without economic purpose and without providing breaks or encouraging the search for illegal reduction of the tax burden.

3.1.7. In transactions with related parties, subject to Transfer Pricing rules, these shall be calculated in accordance with the laws and regulations of each country or region where they will be held and also by the transfer pricing guidelines published by the OECD.

3.1.8. When tax legislation lacks clear and objective guidelines, the Company will enlist the assistance of independent tax advisors. If necessary, it will also seek confirmation of the applicable tax treatment from the competent tax authorities.

3.2. Relationship with Tax Authorities

3.2.1. Seek to establish a good relationship with the tax authorities of the countries where it operates, collaborating in whatever is necessary and providing all of the requested information in a clear, accurate and complete way.

3.2.2. Participate in discussions on tax issues together with business organizations and those promoted by tax authorities of the segments in which it operates.

3.2.3. Not get involved with any type of business corruption and seek that same commitment in its value chain. Thus, the Company’s Employees or executives are instructed not to offer or accept bribes for the purpose of obtaining tax benefits or reduction of the Company’s tax burden.

3.3. Alignment with the company’s other policies

3.3.1. The tax strategy should observe the Company’s Code of Ethics, which is widely disseminated to all employees and executives, and extended to members of the Company’s governance bodies.

3.3.2. The Company extends the above-mentioned guidelines and good tax practices to its supply chain through the Code of Ethics.

3.3.3. The Company provides training through the “Cielo University” to all its Employees in order to disseminate the pillars of this Policy.

4. Supervision and Audit

4.1. The main tax proceedings are reviewed periodically by the Company’s Internal Audit and every six months by independent auditors or external expert advisors, thus ensuring that the Company does not implement aggressive or evasive tax policies that may result in risks to its shareholders.

4.2. In order to assist with a possible inspection, the documents supporting the calculations and payment of taxes are properly kept, filed at the Company’s headquarters.

IV. Consequence Management

Employees, suppliers or other stakeholders who observe any deviations from the guidelines of this Policy may report the fact to the Ethics Channel through the channels below, with the option of anonymity:

Internally, non-compliance with the guidelines of this Policy gives rise to the application of accountability measures to the agents that fail to comply with it, according to the respective severity of the non-compliance and as per internal regulations, and is applicable to all persons described in the item “Scope” of this Policy, including the leadership and members of the Executive Board.

V. Responsibilities

  • Administrators and Employees: observe and ensure compliance with this Policy and, when necessary, call the Legal and/or Tax Management teams for consultation on situations involving conflict with this rule, or upon the occurrence of situations described herein.
  • Executive Vice Presidency of Finance and Investor Relations: Responsible for proposing the updating this Policy with regard to the internal and external public, seeking alignment with the best market practices, as well as compliance with the guidelines established in this Policy and to get answers regarding this policy and the current tax legislation.
  • Board of Directors: approve this Policy and its revisions and certify the existence of mechanisms to ensure compliance.
  • Fiscal Council: Mmonitor the acts of the directors covered by its legal and statutory liability in order to, where applicable, report them to the Administration bodies. In case they do not take the appropriate measures, the matters will be directed to the General Meeting so that appropriate measures can be taken.

VI. Supplementary Documentation

VII. Concepts and Acronyms

  • Advisory Committees: a collegiate decision-making body that aims to satisfy the duties of guiding and supervising the management of the Executive Board and deciding on major business issues, including making strategic, investment, and financing decisions, among other matters provided for in article 142 of the Brazilian Corporation Law and/or the Company’s Bylaws.
  • Board of Directors: a collegiate decision-making body that aims to satisfy the duties of guiding and supervising the management of the Executive Board and deciding on major business issues, including making strategic, investment, and financing decisions, among other matters provided for in article 142 of the Brazilian Corporation Law and/or the Company’s bylaws.
  • COSIF (Accounting Plan of National Financial System Institutions): represents the accounting criteria and procedures to be observed by financial institutions and other institutions authorized to operate by the Central Bank of Brazil (“Bacen”), as well as the structure of accounts and document templates.
  • IFRS (International Financial Reporting Standard): corresponds to international financial reporting standards issued by International Accounting Standards Board – IASB.
  • OECD (Organization for Economic Cooperation and Development): international organization that provides a platform to compare economic policies, solve market problems and coordinate domestic and international policies.
  • Stakeholders: all relevant audiences, whether internal or external, consisting of people, groups, organizations, associations and other actors who influence or are influenced by the Company’s activities, products and services and who may be impacted by its decisions, actions and performance. Examples of Stakeholders include, but are not limited to: suppliers, investors, employees, local communities, the press and civil society organizations.

VIII. General Provisions

The Company’s Board of Directors is responsible for altering this Policy whenever necessary.

This Policy takes effect on the date of its approval by the Board of Directors and revokes any documents to the contrary.