The Sumitomo Chemical Group considers paying taxes one of the most fundamental and important social responsibilities of a company. We comply with the tax laws applicable to each country and properly pay taxes in accord with that spirit.
The Group understands that using exceedingly beneficial tax systems in regions or countries with no or low taxes (so called tax havens) hinders the collection of proper taxes in each country. By not using tax havens with the purpose of avoiding taxes and by paying appropriate taxes in the countries and regions where it does business, the Group aims to help spur economic development in those countries and regions.
The Sumitomo Chemical Group has established the Sumitomo Chemical Group Tax Policy to ensure tax transparency and enhance tax compliance.
Sumitomo Chemical Group Tax Policy
Sumitomo Chemical Group conducts business in a wide range of countries and regions based on the Sumitomo Spirit which has been passed down through generations for over 400 years, the basic teaching of which is to contribute to society through its business activities. The Sumitomo Chemical Group recognizes that tax payment is one of the most fundamental and important social responsibilities that companies should fulfil. In accordance with the below fundamental policies, the group complies with the respective tax laws in each country in which it operates, ensuring correct tax payment in the spirit of its business philosophy. Through this, the group strives to build relationships of trust with various stakeholders and contribute to the economic development of each country and region.
The Sumitomo Chemical Group will comply with all tax laws and regulations applicable to all countries and regions in which business activities are conducted, and will file and pay taxes accordingly.
The Sumitomo Chemical Group considers and implements tax planning measures in order to improve the cash flow of the business, but such tax planning is done fully in compliance with the laws of each country, ensuring proper consideration of the business circumstances, and does not carry out tax planning for the purposes of tax avoidance.
The Sumitomo Chemical Group understands that the use of countries or regions with low tax rates or no tax payable (known as “tax havens”) will be to the detriment of appropriate tax payments in each country. Therefore, the Group does not use tax havens for the purposes of avoiding taxes but instead wishes to contribute to each country’s economic development by appropriate payment of taxes.
The Sumitomo Chemical Group sets transaction prices so that cross-border related-party transactions are carried out based on the arm’s length principle, in accordance with the OECD Transfer Pricing Guidelines, in order to ensure the appropriate tax payment in each country and region. The group also ensures regular review of the appropriateness of its profit allocation based on the functions, risks and assets of each group company and the respective contribution each group company makes to the group business. The group also prepares transfer pricing documentation in accordance with the relevant tax laws and regulations.
Uncertain Tax Positions
The Sumitomo Chemical Group conducts business globally, and in addition to conducting various types of transactions, there may be cases where taxation related matters and tax positions may be unclear due to increasingly complex tax systems. For such cases, the group will carefully consider each situation and strive to make decisions that will minimize tax risk, such as by consulting with independent experts and utilizing advance consultation procedures with tax authorities.
Relations with the Tax Authorities
In addition to the group ensuring appropriate filing and payment of tax in each country and region, the Sumitomo Chemical Group will also endeavor to build and maintain good relationships with tax authorities by responding in good faith to their requests.
The Sumitomo Chemical Group Tax Policy was established to diligently implement initiatives aimed at ensuring tax compliance and transparency, and it is shared with Group companies in Japan and overseas. We comply with the tax laws of each country and region where we do business and strictly and appropriately pay taxes.
Furthermore, important tax issues and strategies are reported to regular Management Meetings and Board of Directors meetings.
Goals and Results
Corporate Income Taxes Paid
Tax Amounts of Sumitomo Chemical Group