107

2021 INTEGRATED MANAGEMENT REPORT

We have updated our 'Corporate Tax Policy', which outlines the company's tax strategy and commitment to tax best practices.

CEPSA S TAX STRATEGY

We are aware of the social usefulness of our tax contributions in the countries and territories where we operate, as an essential contribution to public spending on basic services for citizens, families and society as a whole.

Our tax strategy complies with tax legislation applicable in each area, taking into account social interest and ensuring the achieve- ment of long-term business objectives while avoiding tax risks and inefficiencies in our business activities.

TAX GOVERNANCE AND CONTROL FRAMEWORK

Our Board of Directors approved the 'Corporate Tax Policy in 2021, outlining our tax strategy and our commitment to tax best prac- tices. We actively disseminate our policy through the company s committees and bodies involved in this area.

The tax unit ensures and regularly checks that the principles underlying our management procedures, based on international ben- chmarks, are applied in the course of business. In our investment processes, all projects must undergo an approval procedure that includes an analysis of any tax implications, among other steps. The proposal is evaluated by the Investment Committee prior to approval by the Management Committee and the Board of Directors.

Compliance with tax legislation is assured through various Internal Control System mechanisms and the integrated risk manage- ment system implemented under COSO II ERM (Enterprise Risk Management - Integrated Framework of the Committee of Sponso- ring Organisations of the Treadway Commission).

We have also rolled out a specific tool to facilitate tax management and strengthen control and monitoring of tax compliance. A specific tax risk map is prepared, presented to and validated by the company's Risk Committee.

The Ethics Committee is responsible for the ongoing supervision of the design and implementation of best practices in monitoring, investigation and personnel training to prevent any misconduct. Our people must always observe these ethical standards and should contact the Ethics Committee through its Ethics and Compliance Channel in the event of doubt.

Annual reports on the functioning of these systems and mechanisms, and on the design and efficiency of the controls in place, are submitted annually to the Audit, Compliance, Ethics and Risk Committee.

Cepsa s Board of Directors is promptly informed of the tax policies and criteria applied and the degree of compliance with the Cor- porate Tax Policy.

3.7.1 Management approach