Tax Strategy

HUGO BOSS firmly believes that paying tax is of central importance to our global economic and social relationships. By paying taxes, the company assumes responsibility for actions in every country it operates in.

The fiscal framework of globalized business is often complex and subject to interpretation by authorities and corporate management. Recent international developments have also led to tax legislation changing more quickly than previously.

Aside from complying with tax regulations, having adequate risk management structures in place is crucial. Clearly defined roles and responsibilities further enable taxes to be handled in a professional and targeted manner. For HUGO BOSS, this includes fair cooperation in the spirit of partnership with local financial authorities.

For this purpose, HUGO BOSS has drawn up 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 Managing Board

Tax Strategy 2020

Development of effective tax rate

(In EUR thousand) 2020
Earnings before taxes (273,236)
Anticipated income tax (80,741)
Tax effects of permanent items 5,076
Tax rate-related deviation 13,109
        thereof effects of changes in tax rates 389
        thereof adjustments of tax amount to diverging local tax rate 12,720
Tax refund/tax arrears 5,055
Deferred tax effects from prior years (1,431)
Valuation allowance on deferred tax assets 5,925
Tax effects from distributable profit of subsidiaries 135
Other deviations (1,182)
Income tax earnings reported (54,054)
Effective tax rate 20%

Breakdown of income tax accrued (current year) by country

The decline in sales due to the temporary store closings as well as the extensive restrictions on public life in many places and the resulting regionally very different earnings development are also reflected in the accrued income tax expenses for the 2020 financial year. Hereby the current tax expenses only reflect operations in the current year and do not include deferred taxes or provisions for uncertain tax liabilities.

Despite the COVID-19 pandemic and the negative sales trend, Germany, as one of the HUGO BOSS core markets, had the highest current income tax expenses (excluding aperiodic effects). The Chinese mainland was able to quickly return to growth after the lockdown in the first quarter and ended the financial year above the previous year's value, consequently resulting in the second highest current income tax burden in the 2020 financial year. Furthermore, the United States and Great Britain are among the core markets of HUGO BOSS Group, which is also reflected in their share of income tax accrued. The distribution of the current income tax accrued among the other countries corresponds to the respective course of business.

Main countries of company’s operations Income tax accrued 2020
Germany 30 %
China 22 %
United States 14 %
Great Britain 7 %
Spain 4 %
Italy 4 %
Mexico 4 %
Benelux 2 %
Portugal 2 %
Russia 2 %
Other countries 9 %
Result 100 %

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

The vision of HUGO BOSS is to be the most desirable fashion and lifestyle brand in the premium segment of the global apparel market. The Group is convinced that further elevating the desirability of its two brands, BOSS and HUGO, represents the most important factor for the Company’s long-term success.

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.