Core Principles
The Otsuka group recognizes that we can contribute to the economy and welfare of those countries where we do business through the payment of taxes in accordance with the local laws and regulations. The group is guided by the Otsuka Group Global Code of Business Ethics, tax policies, the national taxation laws in each jurisdictions, the international tax treaties and the taxation rules. We refrain from engaging in transactions aimed at tax avoidance and we will file and pay taxes appropriately in each country. Also the group will make ourselves transparent and trustworthy in our relation with the tax authorities in each country through the disclosure of information. Surrounded as we are by the increasing complexities arising from globalization of our business, we will minimize taxation risks through recurrent updating of information and through consultation with tax experts.
Engagement with the Tax Authorities
The group keeps on being committed to building constructive relationships with tax authorities in the countries and regions in which we do business. As the globalization and digitization of the world economy has proceeded, we have witnessed the fundamental reform on international taxation rule. A reform initiated by the Organization for Economic Co-operation and Development (OECD), and the reform has led to the emergence of a so called Global Minimum Tax rule.
Under this rule we will be bound to pay additional tax if the tax burden rate in a tax jurisdiction goes below the 15% threshold. This rule has been introduced in a number of countries and regions where we do business and a number of our subsidiaries have been subject to this rule since 2024.
We recognize that this external environment will make the tax reporting to the authorities more complicated and wider in scope than before. We will be committed to improve the reliability of our data on tax and to enhance our readiness for timely reporting.
Transfer Pricing Policy
The group is conducting our intercompany transactions at the arm’s length price. We do this by referring to the OECD guidelines, which aims at the elimination of the double taxations and the fair application of the transfer price taxations as well as the laws and regulations of each countries. Also, when the need arises, we obtain prior agreements from among the tax authorities by filing Advance Pricing Agreements (APA).
Governance
We are aware that the maintenance and improvement of corporate governance on tax-related matters will contribute to the enhancement of corporate value. With this goal in mind, under the initiative of the CFO, we have our tax department to take the lead in building the internal organizational structure to enable us to duly improve our tax compliance and minimize the taxation risks through the retention and the training of human resources we have among our various departments and among group companies. Also, we will make ourselves accountable to the Board of Directors and the Audit and Supervisory Committee for this Policy and its execution and maintenance.
Tax Policy
The Otsuka group recognizes that we can contribute to the economy and welfare of those countries in which we do business through the payment of taxes in accordance with the local laws and regulations. As a growing demand for the transparency put upon the multinational enterprises, the group, that is doing business globally, will aim at enhancing our fair and transparent conduct in our tax matters by having basic values for compliance planted among employees not only those in the reporting line to the CFO but also among all the other employees through the observation of the Otsuka Group Global Code of Business Ethics.
Also, the group will build constructive relations with the tax authorities of all the tax jurisdictions where we do business through the retention or the submission of reliable data.
In accordance with its tax compliance policy, the Otsuka group will implement effective management, strengthen governance, build constructive and positive relationships with respective tax authorities and fulfill its tax obligations in all countries and regions.
Established on June 26, 2020
Revised on March 31, 2025
Executive Director, CFO
