LIONSGATE UK TAX STRATEGY

Updated: 31 March 2024

In compliance with section 161, as well as sections 19(2) and 22(2) of schedule 19, of the Finance Act 2016, Lions Gate International (UK) Limited, Lions Gate International Media Limited, and Entertainment One UK Limited (together, the “Companies”, and with their UK subsidiaries and affiliates, “Lionsgate” or the “Group”) are publishing their tax strategy for the year ending 31 March 2024.[1]

Our business has a strong focus on corporate responsibility, timely and accurate tax administration, and, reporting payments according to applicable law.

Our overall tax strategy is to:

Meet all legal requirements and to make all appropriate tax returns and tax payments;
Seek to utilise available tax reliefs and incentives where available in a manner which is consistent with the government’s policy objectives;
Consider the tax impact in major or complex business decisions, for example corporate acquisitions and disposals;
Operate in an environment where we consider tax in the context of our reputation and brand;
Comply with appropriate tax risk processes, and ensure the boards of directors of the Companies (the “Boards”), which may establish policies for the UK companies in the Group, have oversight of this compliance; and
Comply with all applicable tax/finance laws.

[1] Entertainment One UK Limited was acquired by the Group’s parent Lions Gate International Motion Pictures S.à r.l. on 27 December 2023.

Tax Risk Management and Governance Arrangements

The Boards of the Companies are responsible for the tax strategy of the UK companies in the Group (the “UK Group”). In accordance with UK rules, the Group nominates a Senior Accounting Officer (“SAO”) for each of the companies in the UK Group. Day to day responsibility for the tax matters of each company in the UK Group is handled by such Companies’ SAO (or its designees). As discussed in more detail below, such person or persons work regularly with the Group’s Chief Tax Officer (“CTO”) and the Group tax department to ensure that processes of tax compliance are carried out correctly and to manage tax risk for the UK Group.

The Group tax department identifies and manages UK tax risks using its knowledge of the UK Group’s operations and UK tax legislation. Specifically, the Group tax department engages in:

Regular communication with the SAO of each UK Group company, as well as other finance and legal staff within the UK Group to keep informed of any significant business changes;
Regular communication with Group treasury and legal departments about intra-group finance and shareholdings or business arrangements that potentially could affect the UK business and the Group;
Regular communication with professional tax advisors in the UK and other countries to keep informed of tax developments and their impact on the Group;
Involvement in all corporate acquisitions and investments, including review of (a) financial and tax due diligence reports into the target’s business and (b) draft agreements; and
Monitoring proposed changes in UK and other country tax legislation to identify their potential impact for the UK Group.

The Boards of the Companies shall review and approve the UK Group’s tax strategy at least annually. In addition, the Group’s Audit Committee monitors the Group’s tax risks and receives quarterly reports from the CTO on the principal tax risks and tax law changes in the UK and worldwide.

Tax Planning

We believe it is important to plan our business operations so that we can comply with UK and other country tax obligations, such as the Criminal Finances Act of 2017 regarding tax evasion, and to consider the tax consequences of transactions before carrying them out. Furthermore, Lionsgate is committed to acting with integrity in all business dealings and relationships.

Where there are alternative methods to achieve the same commercial result, we will consider all relevant factors including taxation before deciding on the best method.

The Group tax department is consulted on the tax consequences of major potential transactions including acquisitions and disposals. It advises on the preferred routes to minimise potential tax risks and costs.

The UK Group focuses on ensuring compliance with indirect, direct, and payroll taxes to minimise any risk of penalties arising from failure to timely and accurately file and remit such taxes. The UK Group provides relevant information to the Group tax department who, along with the respective SAOs of the UK Group companies, manages the corporate tax compliance.

The Group tax department consults external advisors regarding the tax implications of a potential transaction or other aspects of the business when necessary. Typically, this occurs where the Group does not have sufficient in-house expertise, the transaction is of a new type to the Group, or is of significant scale, or where recent or pending tax law is involved. Tax planning advisors are also consulted with respect to non-transactional items, including the effects of legislative/regulatory changes.

The strategy for the UK Group is approved by the Boards of the Companies, which are the main UK trading entities of the UK Group.

Level of Tax Risk

In accordance with the strategy approved by the Boards of the Companies, the Group takes a measured approach to tax risk as it does to other risks in the business. We recognise there is always some level of risk on taxation due to

The complexity of, and frequent changes in, tax laws and business transactions;
The possibility of disagreement over the interpretation of tax laws; and
The variety and volume of different taxes that affect the Group’s activities.

Approach towards HMRC

Self-assessment for most taxes means that the Group calculates and pays all UK taxes itself based on its application of UK legislation. As the Group is a large business, Her Majesty’s Revenue and Customs (“HMRC”) has appointed a Customer Compliance Manager (“CCM”) to coordinate HMRC’s risk assessment and manage HMRC’s relationship with Lionsgate.

We strive to be fully transparent when engaging with our CCM and other HMRC tax personnel. The Group is in regular contact with the CCM. We update HMRC on a regular basis about developments in our UK business, and raise material tax issues prospectively when necessary to ensure compliance with UK law.

Lions Gate seeks clearances from HMRC when appropriate regarding the UK tax treatment of changes in our business and applicable law. We timely respond to HMRC questions and provide complete information requested in a collaborative, cooperative manner.

This statement has been approved by the Boards of the Companies.

Dated: March 2024