Public Policy Statement | December 2023

Global Tax Strategy

In line with our corporate and social responsibilities, Merck recognizes our role as a
responsible taxpayer to pay our full share of taxes, including corporate income taxes. We
also recognize that our contribution is much more than the corporate income tax we pay.
We pay a significant amount of taxes to national and local governments in the form of
employment taxes, value added taxes, sales taxes, excise taxes, property taxes, and
customs duties. We also collect numerous taxes paid by our employees. We pay all taxes
due in full and on time in the jurisdictions in which we operate. The way we conduct
business, including the economic impact from the taxes we pay, also reflects our
commitment to striving to reach those in need with our medicines and vaccines and
helping to build robust, durable health systems worldwide through partnership,
investment and innovation.

Background

Merck & Co., Inc., known as MSD outside the United States and Canada, is headquartered
in New Jersey and operates in more than 140 countries. Our operations have positive and
diverse social and economic impacts around the world, strengthening the communities
where our people live and work. For more than a century, Merck has been inventing for life,
bringing forward medicines and vaccines for many of the world's most challenging diseases.
Today, Merck continues to be at the forefront of research to deliver innovative health
solutions and advance the prevention and treatment of diseases that threaten people and
animals around the world.

Our Values & Standards (Patients First, Respect for People, Ethics & Integrity, Innovation
and Scientific Excellence, and Our Policies That Guide Us) represent the very core of our
character as a company. They guide our decisions and actions, and they are what makes us
a company worthy of trust. These simple but enduring values have earned us the trust and
respect of our colleagues, customers and communities, and are fundamental to our
success.

This document outlines Merck’s global approach to taxation with respect to:

• Tax governance, risk management and compliance

• Level of acceptable tax risk

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Public Policy Statement | December 2023 | Global Tax Strategy

• Tax planning
• Engagement with Tax Authorities

Tax Governance, Risk Management and Compliance

We are committed to complying with all applicable tax laws, regulations and related
disclosure requirements in every jurisdiction where we operate. Our tax professionals
around the globe are committed to the highest compliance standards and are well
educated in relevant tax laws and regulations. Compliance for Merck means paying the
right amount of tax in accordance with applicable tax laws and regulations at the
appropriate time, while disclosing all relevant facts and circumstances to the applicable
tax authority.

Our parent company, Merck & Co., Inc., holds ultimate responsibility for the tax affairs of
the total company, and our Chief Financial Officer is ultimately responsible for Merck &
Co., Inc.’s overall tax position. The day-to-day management of tax is performed by the
company’s global corporate tax department, which is led by the Senior Vice President,
Corporate Tax. Effective oversight of the tax function is maintained by at least an annual
tax presentation to the Audit Committee of the Merck & Co., Inc. Board of Directors and
regular meetings with the Chief Financial Officer, and other executive leaders to discuss
emerging tax matters.

We maintain robust internal controls related to tax processes in accordance with

accounting and reporting principles and we invest in new technology to continuously
improve our financial systems. Management testing of controls is performed by the
internal audit group.

Level of acceptable tax risk

We see compliance with tax legislation as key to managing our tax risk. We strive for full
compliance and are continuously improving our processes, which are based on
standardization, simplification and automation. While we strive to be compliant with all
applicable tax laws and regulations, there is an element of tax risk and uncertainty given
the ever-changing international tax environment. This uncertainty and complexity of
current international tax law is managed by an in-house tax department staffed by
qualified, experienced tax professionals. In addition, we regularly seek advice from
independent external tax advisors to minimize our tax risk.

Our approach to tax planning

We comply with tax rules and regulations on a worldwide basis and only engage in tax
planning that is aligned with our commercial business activities and reputation. We are
committed to the arm’s length standard in transfer pricing and OECD guidelines for

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international tax matters. We have a zero-tolerance approach to tax evasion and the
facilitation of tax evasion. Where uncertainty exists and when appropriate, we seek
clarification from our external advisors and/or governmental authorities. This can take the
form of tax rulings or advanced pricing agreements from governmental authorities. We
monitor proposals and changes to tax incentives and regulations in the countries in which
we operate in order to assess their impact on our business, and we actively participate in
industry groups interacting with government representatives to support the
development of effective tax systems that encourage innovation and growth. We utilize
available tax incentives and opportunities, such as Research and Development tax reliefs,
in the spirit in which they were intended.

Our engagement with Tax Authorities

We are committed to acting with integrity and transparency with all tax authorities. We
seek to have a professional and constructive relationship with all tax authorities. We file
timely and accurate tax returns, and we respond openly and promptly to any questions
that may be raised in relation to our tax returns. Like any multinational company, our tax
returns are continuously under audit around the world. In the event a tax authority
disagrees with our views on the appropriate tax treatment of a given item, we will work
constructively to try to resolve the issue in a timely manner through appropriate methods
of dispute resolution. However, given the complex nature of international tax law, we may
not always reach agreement with a tax authority on all tax matters.