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Compliance and regulatory risks
How we manage risk continued
Ahold
Annual Report 2010
Group at a glance
Performance
Fi nancials
Investors
Risks related to unforeseen tax liabilities
Because Ahold operates in a number of countries, its income is subject to taxation in differing
jurisdictions and at differing tax rates. Significant judgment is required in determining the
consolidated income tax position. We seek to organize our affairs in a tax-efficient and balanced
manner, taking into account the applicable regulations of the jurisdictions in which we operate.
As a result of Ahold's multi-jurisdictional operations, it is exposed to a number of different tax
risks including, but not limited to, changes in tax laws or interpretations of such tax laws. The tax
authorities in the jurisdictions where Ahold operates may audit the Company's tax returns and
may disagree with the positions taken in those returns. An adverse outcome resulting from
any settlement or future examination of the Company's tax returns may result in additional tax
liabilities and may adversely affect its effective tax rate, which could have a material adverse
effect on Ahold's financial position, results of operations, and liquidity. In addition, any
examination by the tax authorities could cause Ahold to incur significant legal expenses and
divert management's attention from the operation of its business.
Risks related to the legislative and regulatory environment and litigation
Ahold is subject to federal, regional, state, and local laws and regulations in each country in which
it operates relating to, among others, zoning, land use, antitrust restrictions, work place safety,
public health including food and non-food safety, environmental protection, community right-to-
know, alcoholic beverage sales, pharmaceutical sales, and information security.
A number of jurisdictions regulate the licensing of supermarkets, which may entail the restriction
or prohibition of certain business operations. Employers are also subject to laws governing their
relationship with employees, including but not limited to minimum wage, overtime, working
conditions, health care, disabled access, and work permit requirements. The cost of compliance
with, or changes in, these laws could reduce the profitability of Ahold's stores and could affect its
business, financial condition or results of operations. Ahold is subject to a variety of antitrust and
similar laws and regulations in the jurisdictions in which it operates. In a number of markets, Ahold
has market positions that may make future significant acquisitions more difficult and may limit its
ability to expand by acquisition or merger. Due to the wider scope of activity of various regulatory
and governing bodies, and the litigious environment that Ahold may experience in the markets in
which it operates, litigation may increase in frequency and materiality.
