Ferrari believes that a business conduct dedicated to ethics and integrity, built on the dignity of every human being, represents a fundamental value of Ferrari Group and a key driver for the success of its business.
As outlined in the Code of Conduct (“Code”), Ferrari “seek(s) to create an environment that promotes values, adheres to and rewards ethical conduct as practiced by all members of our workforce resulting in a cooperative working environment in which the dignity of each individual is respected”.
In order to reaffirm and renew its commitment to safeguard the fundamental human rights set forth by the laws and regulations of each country where it operates and the recognized international standards (“Human Rights”), Ferrari adopted the Human Rights Practice (“Practice”).
The Practice represents a core part of Ferrari’s mission, culture and heritage and emphasizes the Group commitments to respect, protect and promote Human Rights, in particular: (i) in the workplace, operations and activities; (ii) across the supply chain; (iii) in the interactions with Society and local communities; as well as (iv) in any further context in which Ferrari operates.
Through the Practice, Ferrari intends to provide to all Ferrari Workforce members, as well as to all Ferrari’s Stakeholders, the principles, values and guidelines that must be followed to ensure, in all circumstances, the maximum protection of the Human Rights of all the people directly or indirectly impacted by Ferrari’s operations.
As underlined in Ferrari Code of Conduct (the “Code”), Ferrari is committed to the highest standards of integrity, honesty and fairness in all internal and external affairs and does not tolerate any kind of bribery.
In order to guarantee compliance with all applicable Anti-Corruption Laws, Ferrari has adopted an Anticorruption Compliance Program (the “Program”) that consists in an articulated system of rules and controls aimed at preventing corruption-related crimes and that takes into consideration the requirements and guidance of ISO 37001:2016 related to “anti-bribery management system”.
The Anticorruption Compliance Practice (the “Practice”) - inspired by the values and principles described in the Code - is the Program’s milestone and outlines the general rules of conduct that have to be followed not only by Ferrari directors, officers and employees, but also by all those who work, in Italy and abroad, for or on behalf of Ferrari. The rules outlined in the Practice are further deepened in each internal procedure providing anticorruption standards and controls for specific activities at risk.
Ferrari Top Management is fully committed on this matter and plays a strategic role in the full implementation of the Program, ensuring the involvement of all employees and the consistency of their behaviours with the values contained in it (so called “Tone from the Top” / “Tone at the Top”).
As established by the Code of Conduct (“Code”), “Ferrari Group recognizes the paramount importance of a competitive market and is committed to fully comply with any antitrust and other pro-competition legislation in force in the countries where it operates” and “compliance with competition laws is crucial to the Ferrari Group’s reputation”.
It is therefore clear that competition, intended as the market environment that encourages businesses to excel in the quality and availability of their products and services, together with compliance with the applicable competition laws (“Antitrust Laws”), forms an integral part of Ferrari’s corporate culture and represents a core value that contributes to guide the Group’s operational and strategic decisions.
In order to strengthen its commitment to a fair and free competition, Ferrari has adopted the Antitrust Compliance Practice (“Practice”), which is inspired by the principles set forth in the Code and establishes the rules of conduct that must be followed, at Group level, to ensure compliance with Antitrust Laws.
In particular the Practice, with reference to some specific areas deemed sensitive or at risk under an antitrust standpoint, defines the guidelines and fundamental principles that all members of Ferrari Workforce must follow, as well as the actions and potential controls that they shall carry out, in order to prevent antitrust offences.
As underlined in Ferrari Code of Conduct (the “Code”), Ferrari is committed to fully complying with all applicable laws and regulations and its Third Parties are expected to comply with those laws in connection with any activities or business conducted for and on behalf of Ferrari Group.
In order to implement and strengthen the Code’s principles, Ferrari has adopted a Third Parties Compliance Practice (the “Practice”) that outlines the general rules of conduct that have to be followed when dealing with all Third Parties, including active and passive counterparties and any further Third Parties that may do business with Ferrari.
Ferrari indeed is committed to collaborate only with Third Parties that meet certain requirements both in terms of compliance with applicable laws and regulations and in relation to ethics, integrity and transparency. To this purpose, the Practice underlines the importance of a “compliance evaluation” before any business relationships, in order to assess and minimize any potential risks and therefore to protect Ferrari assets, integrity and reputation in an overall and long-term vision.
Third Parties are requested to comply with Ferrari ethical principles and standards and this is a clear and essential contractual commitment in all commercial relationships. In doing so, Ferrari Third Parties become also active parties towards their own employees and their respective third parties in order to disseminate a culture of compliance, integrity and transparency in all business relationships.
According to the principle of effective communication laid out in the Code of Conduct (the “Code”), “the Ferrari Group recognises the primary role of clear, effective communication in building internal and external relationships and reaching high company standards.” Creating a company climate of fast, open, two-way communication is a fundamental part of our continued success.”
In keeping with this principle, as well as the Group's strategic aims, Ferrari believes that building and honing effective communication and collaboration with its internal and external stakeholders is essential to generating and sharing value, with a view to conciliating interests and expectations.
Specifically, Ferrari seeks to show fairness and integrity in its dealings with others, encouraging positive relationships based on mutual trust with everyone who affects or is affected by its work. Ferrari's approach to engaging stakeholders therefore aims for honest, clear, effective communication and consultation, based on constant dialogue.
Ferrari believes strongly that a multi-stakeholder approach, backed by a strong commitment, is a key element of sustainable, lasting growth, based as far as possible on a fair balance of the interests and expectations of everyone who interacts with the company.
With this in mind, in order to strengthen its commitment, Ferrari has adopted the Stakeholder’s Engagement Practice, which is inspired by the values and principles in the Code seeks to give guide lines on the right methods and forms of interaction with different stakeholders.
Approved by the Board of Directors on May 12, 2022
TONE AT THE TOP
The foundation of Ferrari’s governance model is the Code of Conduct, duly approved by the Board of Directors of Ferrari N.V. (“Ferrari” or the “Company”) and which also represents the reference framework for tax management, embodying a set of values that are recognized, adhered to and promoted by the Company in tax matters too.
As a result of this, the Ferrari Tax Strategy, inspired by the Code of Conduct, is approved by the Board of Directors of the Company and it applies to Ferrari and its subsidiaries which are collectively defined as the “Ferrari Group”.
The Audit Committee of Ferrari shall be responsible for overseeing that the Company’s compliance practices are in line with the Tax Strategy.
Inspired by the Code of Conduct, Ferrari tax management is carried out in accordance with the following tax values.
The Ferrari Group strives to maintain high standards of integrity concerning tax accounting and tax compliance, in order to pay the amount of taxes legally due in any territory, in accordance with the rules set out by governments.
For the same reason, Ferrari is strongly committed to align - as fairly as possible - the place of taxation with the place of value creation, so as to pay the legally due amount of taxes, in the right place, at the right time.
Furthermore, the Ferrari Group’s internal controls are designed to ensure integrity and accuracy in the recording and reporting of all business transactions, based on which the tax figures are calculated.
To maintain Ferrari Group’s worldwide reputation, Ferrari does not tolerate infringements and complies with all applicable tax laws and regulations, through the implementation of preventive measures and through the rigorous enforcement of its Tax Strategy to ensure that ethics and integrity are respected.
Sustainable and lasting growth
Ferrari is committed to sustainable practices in its tax risk management activities, considering that taxes are a key contribution to the economies of the countries where the Group carries out its business and with a view to protect the Company reputation over time.
At the same time, with the objective of increasing shareholder value, Ferrari operates legitimate tax planning that embraces both the letter and the spirit of the law, such as the use of the tax incentives provided for by the relevant tax legislation.
Tax Authorities engagement
Ferrari engages a pro-active relationship with the competent Tax Authorities, in the jurisdictions where the Group operates, approaching them with openness, honesty and integrity.
In dealing with Tax Authorities, Ferrari transparently provides access to all information on relevant facts and circumstances, to be examined and fully known for an appropriate analysis by the Public Authority.
Ferrari is committed to including always the most appropriate set of tax information in its financial and non-financial reporting, enabling it to communicate its approach in relation to tax and its own effective tax.
The disclosure path should be reasonably balanced with the paramount need to keep certain information strictly confidential (i.e. information which, if disclosed, may result in commercial, reputational or legal damage to the Ferrari Group).
Pursuant to the values adopted in the Ferrari Code of Conduct and relevant also for tax purposes as stated above, the Tax Strategy defines and declines tax management in a way that fully implements the tax principles stated below.
Full compliance with applicable tax laws and regulations - fulfill tax payments, tax returns and any other tax requirements on a fair, accurate and timely basis.
Sustainable approach to tax - ensure an ethical tax conduct while providing superior and sustainable returns to Ferrari shareholders, by applying the legally due level of taxation, aware that through the taxes paid, Ferrari contributes to the growth of the economies and to the reinforcement of social cohesion of the jurisdictions where it operates.
Tax Risk Management - Ferrari is not willing to take tax risks and it will continue to implement compliance controls to mitigate the tax risk factors of breaching tax regulations or abusing any principles or aims of any applicable tax regulations.
Tax Transparency - be co-operative and transparent in the approach with Tax Authorities, nurturing a relationship based on good faith in order to achieve certainty on the tax positions adopted.
Tax Culture - promote the Company’s tax culture, inspired by the principles, values and guidelines underlying the Ferrari Tax Strategy, leading to the correct application of the tax regulations and the proper disclosure of the approach to tax, also with training sessions for all employees, including employees outside of the Tax Department.
Ferrari's Tax Strategy is set out in the following basic rules that the Company intends to maintain, in the daily tax behaviours, in order to achieve the strategic objectives it has committed to.
Ferrari is always inspired to minimise tax uncertainties.
Whereas tax law is unclear or subject to interpretations, Ferrari performs an in -depth tax assessment, to take a reasonable interpretative approach, based on the principle of legality and eventually supported by external advisers, to ensure that the position taken would, more likely than not, be settled in Ferrari’s favour.
Furthermore, in order to better reflect clarity and fairness in all tax matters of the Group’s companies, advance tax rulings and advance pricing agreements may be requested.
Agree to disagree
All significant tax audits must be subject to risk assessment to analyse and determine the choice of any potential compromise positions on audit and the method thereof versus litigation and other dispute resolution procedures (i.e. Mutual Agreement Procedures).
In its own interest and in the interest of its shareholders, Ferrari supports - also in the event of any tax dispute - the reasonable and strong technical position in case of any interpretation differences with the competent Tax Authorities.
Co-operative approach with Tax Authorities
Ferrari promotes the progressive adherence of the most relevant Group entities to the co - operative compliance regimes, to ensure that the Group gains certainty in exchange for transparency.
Tax Authority enquiries and audits will be handled by the Tax Department, enabling the collection of relevant information to be used for the analysis by the Public Authority.
Furthermore, Ferrari applies the provisions on transfer pricing documentation, in line with OECD Transfer Pricing Guidelines, to further enhance transparency with Tax Authorities.
Related parties transactions
Cross-border relations between Group entities are not influenced other than by the application of the widely recognized principle requiring related parties transactions to be conducted at arm’s length terms and conditions, as defined by the OECD Model Tax Convention and OECD Transfer Pricing Guidelines.
Aggressive Tax Planning
The Ferrari Group does not artificially use countries with privileged taxation (i. e. Tax havens), for the sole purpose of reducing the Group’s tax burden.
The jurisdictions in which the Group entities are located reflect in any case the economic substance of the transactions related to the territories concerned and these transactions are taxed where value is added.
Internal controls over tax risks
The Ferrari Group’s policy is to maintain effective internal control systems to ensure compliance with tax laws.
Starting from the most significant entities of the Group, Ferrari is progressively implementing the control system that is specifically focused on tax risks - Tax Control Framework or TCF - in line with OECD guidelines, as transposed by the Italian Tax Authorities, to properly identify, measure, manage and control any tax risks (i.e. breaching tax rules or manipulating the tax system).
In the TCF, roles and responsibilities in the tax management process are clearly defined, in compliance with the principles of segregation of duties and escalation of decisions.
On a yearly basis, a report is submitted to the Board of Directors, through the Audit Committee, on the outcomes of the reviews on the Tax Control Framework together with the remedy measures on the relevant issues.
Ferrari is committed to fully implement and maintain a global Whistleblowing Procedure, providing for anonymous channels made available by the Group to encourage reporting of any illegal or suspicious tax-related conducts, as well as communication of any tax-related concerns. Pursuant to the Ferrari Code of Conduct, there is absolutely no tolerance for retaliation in any form against a person who reports a concern in good faith.
The Company has a Head of Group Tax that reports to the Group’s CFO. The Tax Department is well equipped with resources composed of professionals with extensive knowledge and experience.
The Tax Department is responsible for promoting the culture and values of tax compliance, also by organising training initiatives for all employees, including those that do not belong to the Tax Department.
There are no reward mechanisms for managers linked to the reduction of the tax burden. Appropriate technology solutions maximise the quality and accuracy of the data that sustain tax management and the related tax returns.