Tax Strategy

The Management Team of HUGO BOSS firmly believes that paying tax is of central importance to global economic and social relationships. By paying its taxes, the company assumes responsibility for its actions in every country it operates in. Its tax payments are an important contribution to the expansion and maintenance of infrastructure and social cohesion in every one of these countries, as well as representing a cornerstone in the company´s commitment to conduct and develop its business in a sustainable, fair and cooperative manner across the world.

Despite the fact that there is not always absolute certainty regarding tax in international business transactions, which leaves some scope for interpretation, HUGO BOSS recognizes its clear responsibility in respect of local legislation. For this reason, tax compliance for HUGO BOSS is more than gearing our decision-making processes to the exact wording of the law. It also means taking into account the purpose of the tax law as well as the intentions of the legislator.

For this purpose, HUGO BOSS has drawn up the following guiding principles in the form of a tax strategy aimed at ensuring that legal obligations are met throughout the Group as a whole, as well as aligning it with our economic activities. The following tax strategy was developed by the Group Tax Department and approved by the management board and the Audit Committee.

– The Managing Board

Tax Strategy 2021

Development of effective tax rate

(In EUR thousand) 2021
Earnings before taxes 196,874
Anticipated income tax 58,214
Tax effects of permanent items 1,744
Tax rate-related deviation (9,124)
        thereof effects of changes in tax rates 705
        thereof adjustments of tax amount to diverging local tax rate (9,829)
Tax refund/tax arrears 3,672
Deferred tax effects from prior years 614
Valuation allowance on deferred tax assets (1,579)
Tax effects from distributable profit of subsidiaries (549)
Other deviations (243)
Income tax earnings reported 52,749
Effective tax rate 27%

Breakdown of income tax accrued (current year) by country

Although fiscal year 2021 was once more impacted by the implications of the COVID-19 pandemic, HUGO BOSS recorded a noticeable recovery in global business activity over the course of the year. This led to significant improvements in sales, EBIT, and an increase in associated income tax expenses.

In addition to the swift return to sales and earnings growth, this year’s management activities focused on the implementation and successful execution of the “CLAIM 5” growth strategy.

Despite the COVID-19 pandemic, Germany, as one of the core markets of HUGO BOSS, had the highest revenue1  and current income tax expenses (excluding aperiodic effects). In this context, the current tax expenses only reflect operations in the current year and do not include deferred taxes or provisions for uncertain tax liabilities. As Great Britain, the United States, and mainland China are among the core markets of HUGO BOSS, this is also reflected in their share of revenue1 and income tax accrued. The distribution of revenue1 and current income tax accrued among the other countries corresponds to the respective course of business.

Main countries of company’s operations Sales
20211
Earnings before tax
20211
Income tax accrued 
20211
Number of Employees
2021
Primary Activities
Germany 31% 62% 37% 22% Management activities, supply unit, development and design, production, procurement,  sales
Great Britain 8% 9% 15% 5% Sales, support services
China 6% 6% 14% 10% Sales, support services
United States 11% 5% 11% 6% Sales, support services
Switzerland 14% 10% 3% 3% Supply unit, Trademark unit, development and design, production, procurement, sales
Mexico 2% 2% 3% 2% Sales
Russia 2%

1%

3% 2% Sales
Benelux 3% (2)% 2% 2% Sales, Finance Unit
Canada 2% 1% 2% 2% Sales
Australia 1% 0% 2% 2% Sales
Turkey 3% 1% 1% 26% Production, sales
Spain 2% 0% 1% 3% Sales
France 4% (1)% 0% 3% Sales
Italy 1% 0% 0% 2% Production, sales
Other countries 10% 6% 6% 10%  
Result 100% 100% 100% 100 %  

1 Figures are based on the separate financial statements of the respective subsidiaries included in the consolidated financial statements.

Further information

Declaration of Compliance

The Managing Board and Supervisory Board dealt with the fulfillment of the specifications of the German Corporate Governance Code (DCGK) at length in fiscal year 2018, and have provided a Declaration of Compliance as the result.

Corporate governance

Listed stock corporations are obligated to provide a corporate governance statement in accordance with § 289a of the German Commercial Code (HGB). In addition to the Declaration of Compliance, this includes information on corporate governance practices and a description of the work method of the Managing Board and Supervisory Board.

Compensation

Here, you can find information about the compensation of the Managing Board and Supervisory Board as published in the Annual Report of the prior fiscal year.

Risk Management

HUGO BOSS views the responsible handling of risks as an important part of good corporate governance. This enables risks to be detected and assessed at an early stage and risk positions to be controlled through corresponding measures.

Data Protection

For HUGO BOSS protecting personal data is more than just a legal obligation. We handle personal data from customers, employees, business partners, shareholders and investors responsibly and in a transparent manner. For us this is the basis for every trustful collaboration.

Information Security

In times of digitalization, information security is an important part of the HUGO BOSS group strategy. Protecting our digital business processes is crucial for our success.

Strategy

With its 2025 growth strategy "CLAIM 5", HUGO BOSS is fully committed to strongly accelerate top-line growth, claim its position in the consumers’ minds, and win market share for its strong brands BOSS and HUGO.

Articles of Association & Bylaws

Here, you can download the Articles of Association and the Bylaws of the Managing and Supervisory Boards of HUGO BOSS AG as PDF files.