GROUPAMA / 2020 UNIVERSAL REGISTRATION DOCUMENT

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Examples of such changes include the taxation of life insurance policies or annuities contracts, changes in the tax status of some insurance or asset management products and tax incentives or disincentives to investing in some asset classes or product categories. The role of the Group Tax Department is to provide information, monitor regulations,and advise and assist in the event of tax audits and disputes for all of the Group’s entities and with regard to the “corporate taxation” component. It is regularly approached about specific technical points and is involved in preparing the end-of-year financial statements.In this capacity, it ensures that the tax consolidation rules are applied (Article 223 A et seq. of the French General Tax Code) for the Group and, working with the Group Accounting Department, prepares the report on the tax position of the consolidatedcompanies. It also helps to implement documentation and archiving procedures in terms of computerised accounting records, as required under tax law, particularly as part of dedicated “CFCI” (Computerised Accounting Tax Audit) committees for each French entity. In addition, the Group Tax Department coordinates, in a Steering Committee, the implementation and monitoring of regulations on the automatedexchangeof tax data, in particular resulting from the American FATCA (Foreign Account Tax Compliance Act) regulationsand the transpositionof the EuropeanDAC (Directivefor Administrative Cooperation). Lastly, as regards transfer pricing, it performs an annual update of the Master File meeting the new French requirements under the OECD standards and sends its English version to all international subsidiaries. The Group’s tax situation in France is also marked by the tax partnership betweenGroupamaand DGFIP, since the signing of an agreement on 26 June 2019 with the SPE (Service Partenaire des Entreprises),which constituteda major step in the evolution of the Group’s tax managementand is now an essential componentof its tax policy. With regard to tax news in France, note the continued downtrend of the corporatetax rate, with the confirmationof the target of 25% in 2022, the entry into force of the VAT group regime on 1 January 2023, which is intended to replace the current systemof groupings of resourcesdeploredat the Communitylevel, and the reductionof the CVAE rate by half. Nevertheless, these factors favourablefor corporatetaxationshould be qualified in view of the implementation of an exceptional “Covid-19”contributionfrom health insurers equal to 2.6% in 2020 and 1.3% in 2021 of the amount of premiums. This new taxation targeted at insurers illustrates the risk of the Tax Legislation adopting measures unfavourableto insurers in the managementof the budgetary consequencesof the current health and economic crisis. Groupamagenerally remains vigilant on the future interpretationsor developments of the tax systems in the countries in which it operates that could lead to an increase in tax expenditures, generatecompliancecosts, or adverselyaffect the Group’sactivity, cash position, and net income.

the Legal Department manages regulatory compliance and ❯ Group coordination as regards anti-money laundering and combating the financing of terrorism (AML/CFT). Entities implement applicable regulatory provisions and professional guidance in those of their procedures relevant to this field. The key points of the procedure include categorisationof the risks of money laundering and the financing of terrorism, collecting information on customers and the sources of their funds on the basis of the size of the risk, an automateddetection system for people on asset-freeze lists and politically-exposedpersons, a CRM profiling system for life/savings business activities, and a permanentand periodiccontrolmechanismto check procedures are followed properly. An anti-money laundering and combating the financing of terrorism organisational policy defines the roles and responsibilitiesof the various participants and stakeholders at Group level and at each operational entity concerned, describes the mechanismin place with respect to informingand training employees, determines the methods and conditions for exchanging information required for due diligence, and specifies the procedureto be followed for control and risk monitoring.The Group ComplianceDepartment,in conjunctionwith a networkof Managers in AML/CFT in insurance subsidiaries in France and Internationally,Asset Managersand the regional mutuals, ensure the Group is meeting its obligations in this respect; with regard to the protection of medical data, Group ❯ recommendations are disseminated by the Groupama Assurances Mutuelles Business Division concerned or entity concerned. It is the responsibility of the various Group entities (regional mutuals and subsidiaries) to implement these recommendations,in partnershipwith medical advisers and the Group Data ProtectionOfficer (DPO), and the Claims unit of the Group Insurance and Services Department; as regards the protectionof customers, the key compliancerole ❯ at Groupama Assurances Mutuelles helps with operational implementation of several issues, including: ACPR instruction 2015-I-22 of 2 October 2015 on the ■ questionnaire about commercial practices and protection of customers, various ACPR recommendations, ■ monitoring of the major Group risk of “failure to advise”, ■ application of the Insurance Distribution Directive, which also ■ includes product governance, the prevention and management of conflicts of interest, compensation of distribution networks, and professionalism and CPD, the ongoing enhancement of the permanent control system, ■ monitoring and implementation of action plans to improve ■ marketing measures (OAV); as regards combating corruption and trading in influence (or ❯ influence peddling) (as per France’sSapin 2 law) the key function of Compliance Manager at Groupama Assurances Mutuelles leads various operational implementation projects. 5.3 Changes to the tax laws of countries where Groupama operates may have adverse consequenceseither on some Group products and reduce their attractiveness, especially those that currently receive favourable tax treatment, or on thGeroup’s tax expense. Tax risks

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Universal Registration Document 2020 - GROUPAMA ASSURANCES MUTUELLES