Helen Bradshaw, Global Share Plan Manager – AstraZeneca

Pascal Dutler, Client Relationship Manager – Equatex AG

ifsProShare Conference 2015

International Tax & Global Mobility:Improving Employee Experience & Maintaining Corporate Tax Compliance

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• An Internationally Mobile employee creates a more complex tax position for both the Individual and the Company, particularly in respect of Share Awards

• With the changing footprint and additions to the AstraZeneca Group we have an increasing number of ‘Mobile’ Individuals. These can be categorised as follows:

– Short term assignments– International assignments– One Time relocations– Business travellers– Globally mobile

• To meet our tax reporting obligations it is essential for us to effectively utilise our HR data to assure compliance on behalf of individuals and the company

Background to Modern Mobility at AstraZeneca

Our Approach at AstraZeneca

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Employment status when Share Award is granted

Definition of employment statusTax treatment

International Assignment (Standard, Short Term and Globally Mobile)

Individual is on a tax equalised International Assignment, during the vesting period.

The entire Award will be tax equalised. Award will be subject to hypothetical tax withholding at the highest marginal rate of their home country, AZ meet actual tax liabilities.

One Time Relocations, Business Travellers

Individual transfers internationally within the AZ Group on local terms, during the vesting period.

The Award is not equalised for any portion of the vesting period.  Award will be subject to blended tax rate. Individual is responsible for any additional taxes due.

Domestic (local) Employee Individual spends the entire vesting period in a single country on local terms.

The Award is not equalised for any portion of the vesting period.  Award will be subject to local tax rate. Individual is responsible for any additional taxes due.

Our Partners

• To maintain compliance and improve employee experience requires collaboration between our partners:

HR Data – Workday Share Plan Administrators – Equatex Payroll – NgA and a number of local providers Global Mobility Tax Return Services – PwC Legal and Tax Due Diligence – Solium GSP

• HR data is shared via a number of systems to accurately record, report and analyse individual data and tax requirements for c.11k individuals across 62 countries

• Typically we have 300 assignees and 100 international transfers

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Tax return support over assignment lifecycle

Year 1 2 3 4 5 6 7

International transfer to affiliate (TAF)

OTR

OTR

International transfer with LTI

OTR LTI (TAF) LTI (TAF) LTI (TAF)

OTR LTI (TAF) LTI (TAF) LTI (TAF)

Assignee then International transfer with LTI

Expat LTI LTIExpat LTI OTR LTI (TAF)

Expat Expat Expat Bonus LTI OTR LTI (TAF)

Standard assigneewith LTI

Expat LTI Expat LTI LTILTI

Expat Expat Expat LTI LTIBonus

Key

LTI = Share Award

OTR = One Time Relocation

TAF = International Transfer to Affiliate

Expat and Bonus

LTI and TAF

OTR

Standard assignee(3 years)

Expat Expat

Expat Expat Expat Bonus

Home

Host

Home

Host

Home

Host

Home

Host

Home

Host

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Taxation methodologies in EquatePlus

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EquatePlus offers AstraZeneca the right balance between efficient taxation handling and highly accurate tax calculation

Tax Rule: Allocation Level

Tax at Country Level

IndividualTax Rate

Multiple Tax

Rates

Tax Rule: Participant

Level

Tax Rateon

Allocation

Special Tax

Complexity of Taxation

Accuracy of Taxation

Marginal Tax rates Accurate Tax rates Special Cases

Tax withholding for mobile employees

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• Participant demographic changes

• Leaver Information

• Grant Data

Interface Files Reports

Payroll report

Taxes to payrolls

Tax amount data

Statements

1 2

3

4

5

CORPORATE CLIENT

EquatePlus TAX PROVIDER

Process executionsCreate Order ConfirmationsPublish StatementsCash to participants

• Mobility Tracking• Employee

lifecycle • Transaction

Details

Calculation of tax amounts

Create Tax Statements

Taxable event finalised inEquatePlus

• Create Order Confirmations

• Cash to participants

Publish Statements

• Payroll Instructions

Payroll A

Payroll B

Payroll C

EquatePlus – a platform for tax collaboration

EquatePlus is designed to simplify AstraZeneca’s taxation process by:

• Offering various methods of calculating tax – based on employees complexity

• Gathering relevant employee data from multiple sources in one single platform

• Tracking employment history and mobility of each employee

• Providing tax consultants and other parties direct access to our platform

• Distributing tax money to multiple payrolls

• Increasing efficiency when dealing with highly complicated tax calculation

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Confidentiality Notice This file is private and may contain confidential and proprietary information. If you have received this file in error, please notify us and remove it from your system and note that you must not copy, distribute or take any action in reliance on it. Any unauthorized use or disclosure of the contents of this file is not permitted and may be unlawful. AstraZeneca PLC, 2 Kingdom Street, London, W2 6BD, UK, T: +44(0)20 7604 8000, F: +44 (0)20 7604 8151, www.astrazeneca.com

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