Introduction

China General Nuclear Power Corporation (CGN) is a Chinese state owned enterprise involved in the design, construction and operation of power generation facilities. The preliminary work of Daya Bay Nuclear Power Plant in Guangdong province began in 1979, and CGN was founded in 1994. CGN focused on the development of clean energies such as nuclear power, nuclear fuel, wind power, and solar power. CGN has over 30-years’experience in R&D and operation of nuclear power projects. CGN is the largest nuclear power operator in China and the largest nuclear power constructor worldwide.

CGN signed an agreement with Electricité de France (EDF) of investment in the construction of nuclea power projects in the UK on September 15th 2016, to build Hinkley Point C (HPC) nuclear power project,

and promote the two follow-up projects Sizewell C (SZC) and Bradwell B (BRB). For CGN-led BRB Project, it’s proposed to deploy HPR1000 technology. The UK operations also comprise of investment in

wind farms and trading of uranium.

The UK nuclear build program will require significant investment over a number of years and returns will be generated for CGN through the sale of electricity to the National Grid once these projects have been completed, with the plant expected to remain operational for 60 years. In order to manage these projects, CGN has established a UK group of companies through which its operations in the UK will be carried out.

For the purposes of this document, these UK entities will be referred to collectively as “CGN UK”.

In developing this UK Tax Strategy, we have aimed to align our tax principles below to our Environmental, Social and Governance Policies. This Tax Strategy has been developed and is owned by the UK Financial Director, and was approved by the Board of Directors. At CGN UK we take risk management and compliance seriously and we are committed to ensuring that the interests of all of our stakeholders are taken into consideration, including HMRC.

Tax compliance and reporting

We are committed to meeting all of our legal and regulatory requirements by paying the correct amount of tax and seeking to meeting all of our tax compliance obligations. The approach of Compliance with all laws and regulations, including those relating to tax, is firmly embedded in the business and we have an established internal control system and procedures to help achieve this.

We seek to apply diligent professional care and judgement in our tax compliance activities, and seek to provide sufficient evidence to support all judgements made. In order to ensure that all compliance and reporting obligations are met, CGN UK employs a team of in-house experts and will have regular review meetings with external advisors where appropriate.

Our approach to tax planning

We have a low risk appetite to tax planning as it affects UK taxation, and tax decisions are aligned to business and commercial strategy. Like any other business expense however, we seek to create value for our shareholders. As such, we may take advantage respond to tax incentives, reliefs and exemptions, where appropriate, and in a way that is consistent with HMRC and government policy.

As appropriate, we will seek external professional tax advice to ensure we apply these incentives, reliefs and exemptions legitimately, and if appropriate, we seek advance clearances with HMRC to ensure we minimise the risk of uncertainty.

Governance and risk management

The UK board of directors provides oversight in ensuring that tax is considered within the wider context of the business and in how tax risk is managed across CGN UK. Compliance and risk matters, including those concerning taxation, will regularly be included on the agenda at board meetings. Matters of significance, including those relating to tax, will be referred to the Corporate Headquarters in China where further assistance may be sought.

The UK Financial Director has responsibility over CGN UK’s approach to UK tax on a day-to-day basis which includes the identification, prioritisation and monitoring of tax risk across the business, as well as the escalation of tax risk to the board of directors.

Additionally, the group has an Internal Audit function which will provide monitoring of the UK business in relation to a number of areas, including taxation.

Relationships with Tax Authorities

CGN UK is committed to working with HMRC in an open, honest and transparent manner. Wherever possible, we will seek to achieve early agreement on issues and certainty. This also means that we will seek to work collaboratively with HMRC in terms of keeping them up to date about any commercial developments and events in our business that may have a tax impact. As CGN UK intends to create a long-term presence in the UK, we wish to foster a collaborative working relationship with HMRC.

This Tax Strategy document

This Tax Strategy is applicable to our tax activities as they relate to UK taxation.

This document meets the requirement for CGN UK to publish its Tax Strategy as required by section 161and Paragraph 19(4) of Schedule 19 of Finance Act 2016. It is effective for the year ended 31 December 2021 and covers all CGN UK group companies.