Our overall guiding principle within tax is to have ‘a sustainable tax approach’, emphasising our business anchored approach to managing the impact of taxes while remaining true to the Novo Nordisk values of operating our business in a responsible and transparent manner.

Novo Nordisk is a company with the purpose of driving change to defeat serious chronic dis-eases. As a global company, a fundamental prerequisite for running our operations across many countries and affiliates is to trade products and services across borders within the Novo Nordisk group of companies. Such cross-border trading is subject to transfer pricing regula-tions.

Transfer pricing legislation has the purpose of ensuring a fair split of corporate tax revenue be-tween jurisdictions by restricting multinational companies from artificially shifting profits be-tween jurisdictions. Many countries have implemented standards developed by OECD in their domestic transfer pricing regulations. We follow the OECD principles on transfer pricing and any local requirements, if they deviate from the OECD standard.

We utilise a so-called principal structure for transfer pricing purposes. A principal structure means that all legal entities, except for the principals, perform their functions on contract on behalf of the principals. As a result, entities contracted by the principals are allocated an operat-ing profit according to a benchmarked profit margin based on activity performed or alterna-tively a profit margin agreed in an advance pricing agreement. The remaining residual profit is subsequently allocated to the principals.

The Board of Directors approves the Novo Nordisk tax policy annually and the Audit Committee monitors key tax risks on an ongoing basis.

Novo Nordisk legal and business structures are based on business substance. Consequently, we pay taxes where value is generated. This means that taxes are a result of business considera-tions while always respecting international and domestic tax rules.

Being a global company means that we also do business in low-tax jurisdictions if there is a lo-cal demand for our products. In some jurisdictions where we operate, tax incentives are of-fered, and our tax policy does not prevent us from making use of such incentives in so far as our activities are business-driven and not motivated by tax considerations.

As part of our sustainable approach to tax, we are committed to managing taxes in a responsi-ble way. In recognition of this, we do not use artificial structures or tax havens to reduce our tax payments.

We aim to not only comply with the letter of the law, but also the underlying intent. When mak-ing decisions on tax, we will not take a position in our tax returns unless we feel comfortable that the position we take will be upheld in a court of law if challenged by a tax authority.

Where relevant, we seek to clarify tax uncertainties with the tax authorities before deciding on the appropriate tax treatment. Where we disagree with the position of a tax authority, we will inform the tax authorities thereof and make our views known. If we ultimately fail to come to terms with the tax authority, we will not refrain from bringing cases to the courts to achieve a conclusive answer on the correct interpretation.

We conclude advance pricing agreements in many of our key markets. Putting in place advance pricing agreements ensures that both Novo Nordisk and the involved tax authorities can agree to the intra-group pricing of our transactions and avoid unnecessary dispute. In addition to con-cluding a substantial number of advance pricing agreements, we engage in dialogue with tax authorities on binding rulings and new legislative initiatives to ensure a common understand-ing.

To ensure continuous compliance with our global tax obligations and adherence to our tax ap-proach, we employ qualified tax experts in Novo Nordisk and we continuously monitor new tools and solutions that can help us maintain a high-quality compliance standard. We monitor new legislation and regulatory developments on an on-going basis and assess the impact on Novo Nordisk to remain complaint.

As part of our sustainable approach to tax, we are committed to transparency, and we will con-tinue to be open about our tax practices. We also maintain professional and cooperative rela-tionships with local tax authorities built on mutual trust and dialogue.

Tax risks are monitored, and adequate controls enforced globally through standard tax govern-ance systems and risk reporting and monitoring tools with regular reporting to the Audit Com-mittee and the Board of Directors. Tax risks are managed by our global tax organisation ensur-ing timely involvement of qualified specialists.

We report on the Stakeholder Capitalism Metrics published by the World Economic Forum, and thus report on our total tax contribution in accordance with this standard. Furthermore, we share insights in the annual report on our tax policy and our corporate taxes paid on a region-by-region basis in line with our segmented business reporting dimensions. Our tax policy and contributions are intrinsically linked to promoting investment, job creation, and economic de-velopment to facilitate the achievement of the UN Sustainable Development Goals.

Approved by the Board of Directors of Novo Nordisk A/S

August 2024