REA : Tax Transparency Report 2021

Changing the way the world experiences property

Tax Transparency Report 2021

Tax Transparency Report 2021

Contents

	CFO Message	3
	Overview of REA Group	4
	Tax strategy, policy and governance	5
	International operations	6
	Tax collections and contributions	7
	Basis of preparation	11

2 REA Group Ltd

CFO message

JANELLE HOPKINS

I am pleased to present the FY21 Voluntary Tax Transparency report for REA Group, which provides a summary of the $369.7 million in taxes paid, collected and remitted by REA for the 1 July 2020 to 30 June 2021 period.

This report covers REA Group Ltd and its controlled entities (referred to hereafter as 'REA' or 'REA Group').

FY21 has been a defining year for REA, as we continue our journey of changing the way the world experiences property. The impacts of COVID-19 remain challenging, significantly disrupting REA's business, customers, consumers and the way we work. The pandemic has also caused unprecedented change to society as we navigate through lockdowns, health risks, travel restrictions and property market limitations. Despite the challenges of the COVID-19 pandemic, our team was able to respond to the changing needs of our customers and consumers, while also accelerating our growth strategy through strategic investments.

REA provided various financial support measures to its customers and employees during FY21 to alleviate the impact of COVID-19. Consistent with FY20, REA's wholly owned subsidiaries maintained their ongoing commitment to support our stakeholders and the community during the pandemic, without accessing the JobKeeper program offered by the Australian Federal Government.

During FY20, REA Group worked with the Australian Taxation Office (ATO) and State Revenue Offices on a

collaborative agreement for limited tax deferrals, which provided additional time to navigate the uncertainty and challenges faced by the Australian and global property industry. All tax deferrals were fully repaid by October 2020. We again extend our thanks to the ATO and state-based regulators for their positive engagement and assisting REA to navigate through these uncertain times.

Our commitment to responsible and sustainable business practices underpins everything we do at REA Group. This extends to our pledge to increased tax transparency and the adoption of the Board of Taxation's Voluntary Tax Transparency Code. REA supports the Voluntary Tax Transparency Code as part of our responsibility to pay the right amount of tax and comply with all tax laws.

REA's tax strategy is to support the business by adopting tax effective opportunities that are consistent with tax laws and founded in sound commercial rationale. We seek to engage with regulators, tax authorities, external advisors and industry groups in an ethical, transparent and professional manner.

In FY21, REA collaborated closely with various government and industry bodies

on tax reform agendas and public interest issues, including:

• Working with a Commonwealth Treasury Working Group which provides feedback and recommendations in relation to the proposed OECD/G20 Inclusive Framework on Base Erosion Profit Shifting (BEPS); and
• Joining the newly established Tech Council of Australia, an industry body dedicated to promoting growth in employment and talent development and partnering with government to design safe and effective regulation in the tech industry*.

The information contained in this report should be read in conjunction with our FY21 Annual Report and complies with the standard of disclosure expected of 'large businesses' under the Voluntary Tax Transparency Code. This report

is intended to assist the public in understanding REA's compliance with tax laws in Australia and global markets in which we operate.

Janelle Hopkins

Chief Financial Officer

• REA joined the Tech Council of Australia on 5 October 2021.

REA Group Ltd

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Tax Transparency Report 2021

Overview of REA Group

CHANGING THE WAY THE WORLD EXPERIENCES PROPERTY

REA Group is a leading global digital business specialising in property.

Number of employees

2,800

approx.

REA Group's global headquarters is located in Richmond, Victoria, Australia.

REA Group employs over 1,200 people in Australia and around 1,600 people throughout the greater Asian region.

REA Group also operates the commercial property website realcommercial.com.au and offers financing options to consumers via Smartline Personal Mortgage Advisers. In March 2021, REA announced its proposal to acquire 100% of the shares in Mortgage Choice Limited, providing an opportunity to establish a leading mortgage broking business with increased scale, with the transaction completing on 1 July 2021. In June 2021, the Group acquired a 34.37% interest in Simpology Pty Ltd, a leading provider of mortgage application and e-lodgement solutions for the broking and lending

industries, which further accelerates REA's financial services strategy. In relation to other strategic investments, REA also acquired a 22.33% interest in Realtair Pty Ltd and a 27% interest in CampaignAgent Pty Ltd during FY21.

REA Group's foreign operations included residential and developer property focussed websites and apps in markets including China and Hong Kong, as well as minority interests in Singapore, Indonesia, India and North America. In December 2020, REA Group moved from a minority interest to acquire a controlling stake in Elara Technologies Pte Ltd. In May 2021, REA entered into an agreement to transfer its shares in the entities conducting its Malaysia and Thailand operations to PropertyGuru Pte Ltd (PropertyGuru), in exchange for a minority interest in PropertyGuru, which will provide REA with a strategic

shareholding in a larger, more diversified company. The transaction completed on 3 August 2021, following REA's divestment of its 27% interest in 99 Group on 30 July 2021.

REA Group is committed to investing in the latest technology to deliver a personalised experience to customers and consumers. New knowledge generated from research and development activities enables REA Group to continue to develop the latest software and technologies, resulting in the direct creation of Australian owned intellectual property and jobs in the Australian economy.

Further details of the contributions REA Group makes to the communities in which it operates, including community partnerships and investments,

can be found in REA Group's FY21 Sustainability Report.

4 REA Group Ltd

Tax strategy, policy and governance

DOING THE RIGHT THING

REA Group supports the Board of Taxation's Voluntary Tax Transparency Code (TTC) and is committed to compliance with all tax laws.

REA Group manages its taxation affairs in accordance with the REA Group Tax Governance Policy which has been endorsed by REA's Audit, Risk and Compliance Committee (ARCC).

REA Group's tax strategy is to support the business through adopting tax effective positions that comply with tax law and are founded in sound commercial rationale.

In delivering this strategy, REA Group seeks to:

• Comply with all tax laws and regulations which apply to REA Group and its subsidiaries;
• Pay the legally correct amount of tax;
• Not partake in any form of tax avoidance or tax fraud;
• Engage with regulators, tax authorities, industry groups and external advisors in an ethical, transparent and professional manner;
• Develop, implement and maintain country specific procedures that define controls and assign responsibilities; and
• Identify tax risks and exposures as they arise and report material risks to the ARCC.

Tax risk management framework

REA Group employs strong risk management protocols which apply not only to broader business risks, but specifically to tax risks. The tax risk management framework has the purpose of:

• Appropriately defining tax positions; and
• Providing a framework to outline which tax positions require due consideration from the relevant levels of management, including the ARCC and Board.

These protocols drive a culture of 'doing the right thing' which promotes the effective identification, evaluation and management of all risks.

Material tax risks are reviewed as appropriate by management, external tax advisors, external auditors and the ARCC. Tax controls are regularly updated to reflect the changing business and tax landscape and Sarbanes-Oxley Act requirements, having regard to

the ATO's Tax Risk Management and Governance Review Guide, supported by global best practice.

Engagement with tax and other authorities

REA Group engages with regulators, tax authorities, industry groups and external advisors in an ethical, transparent and professional manner in each of the countries in which the business operates.

REA Group has continued to build on its positive relationships with revenue authorities throughout FY21 and has again initiated proactive engagement with revenue authorities over and above ongoing compliance and reporting obligations.

REA Group Ltd

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