1. Introduction

1.1 Background
This document sets out the tax strategy and strategic tax objectives for the UK subsidiary, Kaifa Technology UK Limited (“Kaifa”), of the group headed up by Shenzhen Kaifa Technology (Chengdu) Co., Ltd in China.
The business of Kaifa Technology UK Limited is the supply of electricity to major energy companies. The primary source of its meters comes from China. The parent company also has further subsidiaries in other countries on the world including Netherlands, Thailand, Israel and etc.
Kaifa recognise income based on the number of contracts they are able to secure with major energy companies.
Kaifa Technology UK Limited is wholly owned by Kaifa Metering Technology (H.K.) Limited, a company registered in Hong Kong, which is ultimately owned by Shenzhen Kaifa Technology (Chengdu) Co., Ltd which is registered in China.
This strategy has also been developed in compliance with Schedule 19 of the UK Finance Act 2016, which requires large groups to publish their UK Tax Strategy, and applies to the year ended 31 December 2024.

1.2 Scope
The tax strategy and the strategic objectives set out in this document are tailored towards establishing a clear approach to the various aspects of tax reporting and compliance for the UK operations of Kaifa. References to “tax” in this document encompass the following taxes in the UK: corporate tax, income tax, indirect tax, and employment tax.

1.3 Ownership and audience
This strategy is owned by Senior Management at Shenzhen Kaifa Technology (Chengdu) Co., Ltd and will be reviewed and approved by the Board of Directors (“BoD”) of Shenzhen Kaifa Technology (Chengdu) Co., Ltd. This strategy is applicable to various stakeholders including the BoD, all finance personnel, and in particular, any professionals employed by Kaifa Technology UK Limited, who have responsibilities in relation to tax in the UK.

2. Business Strategy

2.1 Group overview
Kaifa Technology UK Limited is a subsidiary of Shenzhen Kaifa Technology (Chengdu) Co., Ltd in China focused on the UK operations carried out to provide electricity to major energy companies in the UK. The subsidiary supports the group with added growth and support to the global business.
 
3. UK Tax Strategy

3.1 UK Tax Strategy statement

3.1.1.Tax governance and risk management
The UK management team are responsible for monitoring the day to day operation of tax, for the UK branch. The Senior Management of Shenzhen Kaifa Technology (Chengdu) Co., Ltd have ultimate responsibility and will provide oversight to the UK team with the UK team reporting regularly into Senior Management. If risks are identified, the UK team will communicate to Senior Management to discuss the risk, the impact and the potential solutions.
External advisors are consulted on a regular basis to manage tax risks and ensure the group are compliant with their UK tax obligations. If any significant issues are identified by the UK management team, this would be reported to Shenzhen Kaifa Technology (Chengdu) Co., Ltd BoD for their review and action.

3.1.2.Attitude towards tax planning and approach to tax
The approach to tax and tax planning for Shenzhen Kaifa Technology (Chengdu) Co., Ltd, and their subsidiary Kaifa Technology UK Limited, is carefully aligned to the group’s strategic and corporate objectives and compliance is core to each undertaking made by the group in this respect. Shenzhen Kaifa Technology (Chengdu) Co., Ltd aim to comply with all applicable tax laws and regulations in all jurisdictions, including the UK, however the company will accept benefit from legitimate tax incentives, exemptions and reliefs, if applicable, which are offered by the UK Government to all taxpayers such as capital allowances or R&D tax incentive reliefs.
Shenzhen Kaifa Technology (Chengdu) Co., Ltd will consider the most tax efficient way to undertake business transactions however transactions will always be underpinned by commercial activities and objectives and will be implemented only where this is legitimately structured within the regulations. Shenzhen Kaifa Technology (Chengdu) Co., Ltd will not enter into wholly artificial arrangements. All transactions will also follow the arm’s length principles in line with the group’s Transfer Pricing policies and the OECD guidelines.

3.1.3.Tax Risk
Shenzhen Kaifa Technology (Chengdu) Co., Ltd have a low tolerance towards tax risk and the group proactively engage with advisors to achieve certainty on the tax position which is aligned to the overall approach to risk.

3.1.4.Relationship with HM Revenue and Customs
Shenzhen Kaifa Technology (Chengdu) Co., Ltd aim to be open and transparent in all dealings with HM Revenue and Customs and maintain a proactive relationship, encouraging open dialogue on a timely basis, and seeking clearances where necessary. Where any tax law is unclear or subject to interpretation, Kaifa Technology UK Limited will engage with external tax advisors to ensure that they remain compliant in all operations. Where applicable the group will work with HMRC to attempt to resolve any differences in a timely and professional manner.