AVIANCA S A : UK Tax Strategy ()

AVIANCA - UK TAX STRATEGY 2020

In accordance with paragraph 16(2) of Schedule 19 of the Finance Act 2016 and on behalf of the entire Avianca Group, we are pleased to present our UK Tax Strategy for the Financial Year ended 31 December 2020.

Tax risk management - Governance

Avianca is a consolidated Latin American group of entities operating in the air transportation sector and its related activities. Avianca Holdings, whose shares are traded on the Colombian Stock Exchange and US OTC Markets, has a very strict corporate governance and code of conduct principles, and takes all measures to assure SOX compliance.

The approach of the group to risk management and governance arrangements is therefore very strict. For tax procedures, the organization has a chain of approval according to the complexity, starting with our Head of Financing Planning, then the Board, and Chief Financial Officer. Day to day responsibility for risk management sits with the Head of Tax who reports to the Head of Financing Planning.

Additionally, we have an internal Tax Audit Committee, in charge of reviewing all tax positions, establishing the risk level and taking the required actions to assure the level of risk is minimal. This is standard practice in all the territories in which we operate.

Attitude towards tax planning

The Group also has a complete centralized tax team based in Colombia, a regional finance team for Europe located in Spain, and local advisors for compliance and legal support.

Our first principle is to make our tax planning reflect the economic and commercial reality of our overall business decisions based on substance, taking into consideration the OECD Guidelines and BEPS s (Base Erosion and Profit Shifting) Actions.

Level of tax risk

The level of risk in relation to taxation the Group is prepared to accept is very low, and that is the main reason Avianca has a complex internal tax team, not only with respect to compliance but also to tax planning.

Ultimately the Board decides the level of tax risk the Group is willing to accept in our transactions, always bearing in mind the commercial priorities of the business and our code of ethics.

Working with HMRC

Avianca is committed and willing to approach all communication with HMRC in an open, transparent manner and, where necessary, to assist HMRC in all its enquiries.

We understand and comply with all statutory obligations, filing requirements and/or tax disclosures with tax authorities, in each and all jurisdictions we have a presence in.