UK TAX STRATEGY FOR THE YEAR ENDING 31 DEC 2025
Introduction
Xiaomi Corporation, founded in April 2010, and listed on the Main Board of the Hong Kong Stock Exchange on July 9, 2018 (1810.HK). Xiaomi is a consumer electronics and smart manufacturing company with smartphones and smart hardware connected by an IoT (Internet of Things) platform at its core. The company and its affiliated companies around the globe (together hereinafter referred to as the "Group") maintain the same objective, that is to relentlessly build amazing products with honest prices to let everyone around the world enjoy a better life through innovative technology.
Xiaomi Technology UK Ltd (hereinafter "Xiaomi UK"), is a subsidiary company incorporated in the UK, and is engaged in the distribution of aforementioned Xiaomi products into the UK market.
Pursuant to paragraph 22 (2), schedule 19, Finance Act 2016, Xiaomi UK has published this tax strategy for the financial year ending 31st December 2023, which is comprehensively applicable to all the tax liabilities in respect of which Xiaomi UK has legal responsibilities in, including Corporation Tax, Customs and Excise Duties, Employment Taxes, Indirect Taxes, and any other tax liabilities that may arise from the company's business operation. This document is in line with the Group tax policies and has been approved by the management of Xiaomi UK on Dec 30 2023, and will be annually reviewed and updated.
Tax Risk management
Xiaomi's tax risk management specifically includes the following areas:
• Tax compliance - Xiaomi is committed to complying with all applicable laws, rules, regulations and reporting and disclosure requirements wherever required in connection with its business presence and in accordance with the Company's core values. The Company may take advice from external parties / advisors to ensure compliance with the local tax regulations.
• Corporate Governance - due diligence will be applied in assessing tax risks. In case of uncertainty about the application of tax laws, the Company may take advice from tax advisors based on the tax laws.
• Effective structure of the tax functions - this primarily means a precise definition of duties and responsibilities of the Company's employees and external entities for the various stages of tax settlements.
• Procedures that are important from the tax risk perspective – as indicated above Xiaomi uses special procedures in place to ensure that its business activity complies with the requirements of the UK tax law.
Attitude towards tax planning
Xiaomi aims to ensure that all tax planning and decisions are adequately consulted upon and reviewed by independent external tax advisors, with a view to confirming that all the in-scope arrangements are compliant with relevant UK legislation, regulations, or guidance. In particular, Xiaomi UK is willing to commit that:
• There will not be any tax planning undertaken that is irrelevant to the company's main business operations;
• There will not be any tax planning undertaken solely for the purpose of enjoying tax benefit;
• There will not be any tax planning characterized as treaty shopping;
• There will not be any tax avoidance schemes or aggressive tax planning in place;
Level of risk
As a reputed international group, Xiaomi commits to undertake its corporate social responsibilities to maintain all risks level to the possible minimum, and to avoid any undesirable tax outcomes. The Group's overall internal control framework thoroughly accounts for the tax risks management, and the Group holds a low tolerance level towards any high tax risk outcomes. External tax advisors will also be involved in our local tax management work on daily basis to advise on any uncertainty or ambiguity that may arise in the interpretation of tax laws. Overall the tax risk of Xiaomi UK should remain at a very limited level.
Relationship with HMRC
Xiaomi aims to have a transparent and collaborative relationship with HMRC regarding the disclosure and approval of information to be presented.
In particular, Xiaomi is committed to:
• Engage in open dialogue with tax authorities on significant tax issues;
• File tax returns with accurate figures and on time;
• Seek to resolve issues with tax authorities in real time and prior to filing returns, and if disagreements arise, is committed to working with tax authorities to resolve issues by agreement (if possible);
• Maintain openness and transparency in decision-making, management and tax planning;
• Conduct its business in a manner that ensures an efficient tax result and at the same time complies with the legislature's intent;
• Provide all requested data and information to the tax authorities in a timely manner.
This strategy is applied throughout the Group and is adopted in the UK by the board of Xiaomi Group on an annual basis, corresponding to the respective accounting period.
The last version is updated and published on 31 Dec 2025. It is foreseen that this strategy will also be applied for the year ended 31 December 2025 and will be updated as such in each respective accounting year.