We consider ensuring the transparency of tax payments to be an essential part of the social responsibilities to be fulfilled by good corporate citizens. Due to the globalization of our business, we are likely to face a growing need to handle a more diverse range of increasingly complex tax-related operations. Accordingly, we believe that the coordinated handling of tax compliance is a matter of increasing importance.
We have appointed a Director who serves as CFO, Executive Vice President and Executive Officer to be responsible for tax governance across the Group, and established the Group Tax Rules, the Group Tax Practice Guidelines and other relevant rules that provide specific operational guidelines based on the Group General Tax Policy, outlined below. We pay taxes in a proper and fair manner in conformity with all applicable tax laws enforced in countries where we operate. By enhancing the transparency of our tax payment through appropriate disclosure, we will fulfill our responsibility as a company.
The Finance & Accounting Department serves as the primary business unit responsible for tax-related operations. In accordance with the “Group Tax Rules,” this department is charged with furnishing information and advice to each Idemitsu department as well as Group affiliated company handling transactions. The Finance & Accounting Department is also tasked with providing relevant in-house education and responding to tax inspections in addition to planning and implementing necessary countermeasures aimed at ensuring tax compliance and optimizing the management of tax expenses. Moreover, all Idemitsu Group employees are obliged to comply with the aforementioned regulations and handle tax-related operations in an appropriate manner. To this end, whenever requested by the Finance & Accounting Department, Group employees report on said operations and submit relevant documents while asking it to provide prior consultation where necessary.
We cooperate with tax authorities in a straight-forward, appropriate manner and prohibit our employees from making any inappropriate responses involving falsification or concealment. We endeavor to explain our group’s position and standpoint to the best of our ability in order to ensure the comprehension of tax authorities when they inquire about or point out issues pertaining to our handling of tax-related operations. Moreover, we utilize the advance inquiry procedures offered by tax authorities to ensure the appropriate payment of taxes. By voluntarily disclosing information to tax authorities, we thus strive to prevent the occurrence of and minimize the risk of tax-related incidents.
Should a tax compliance violation occur, we will take a stringent approach to its correction. We will also ensure that measures to prevent recurrences are implemented in accordance with in-house rules and regulations stipulated by the Idemitsu Group. There were no violations in FY2021.
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