Fukuda Denshi UKLtd.　Tax Strategy

Introduction

The UK branch (hereafter UK branch) of FUKUDA DENSHI CO., LTD (hereafter FUKUDA) was established in December 1996 to serve the UK market with our products and related services. The UK branch is now dormant, and its business was transferred to Fukuda Denshi UK Ltd (hereafter UK Subsidiary), which was established in April 2017. The UK tax strategy of the UK Subsidiary is in accordance with the tax policies of the FUKUDA group. This strategy applies to the UK Subsidiary in accordance with paragraph 19 of Schedule 19 to the Finance Act 2016. The strategy has been published in accordance with paragraph 19(4) of the Schedule.

This strategy applies from the date of publication until it is superseded. References to ‘UK Taxation’ are to the taxes and duties set out in paragraph 15(1) of the Schedule which include Income Tax, Corporation Tax, PAYE, NIC, VAT, Insurance Premium Tax, and Stamp Duty Land Tax.

Management Principle

The UK Subsidiary conducts its business activities in a manner which ensures it fulfills its legal obligations and makes sufficient disclosure to the tax authorities. FUKUDA, including the UK Subsidiary, gives priority to corporate governance as a key management principle. We consider the proper management of our tax affairs to be a part of our corporate values. The management team are charged with continuously improving corporate values in a transparent and efficient manner.

Governance

・The tax strategy and compliance is the responsibility of the Board of the UK Subsidiary.

・The tax affairs of the UK Subsidiary are managed by the Managing Director and reported to the UK Subsidiary Board and Accounting General Manager of FUKUDA.

・The responsibilities of the Board of UK Subsidiary include the judgement and decision making for tax affairs.

・Managing Director of the UK Subsidiary is responsible for identification, prevention and incident management of tax risks. Any significant tax issues will be reported to the UK Subsidiary Board, and also to the parent FUKUDA DENSHI Internal Audit and Compliance & Risk Committee.

Approach to risk management

・FUKUDA has a Compliance and Risk Management Committee, which was set up to evaluate the levels of risk on a continuous basis. Their duties include preventing any risk from occurring, confirming the status of the risk occurring and dealing with identified risk. There are regularly scheduled meetings of the Committee, and extra meetings will be held when required.

The UK Subsidiary is included in its scope and the UK Managing Director reports any relevant matters.

Additionally, from the perspective of preventing any risk from occurring, FUKUDA's Corporate Group Code of Conduct is in place, and all executives, auditors, and employees of the FUKUDA group, including the UK Subsidiary, behave in accordance with the Code of Conduct.

・FUKUDA and the UK Subsidiary understand that the implementation and operation of procedures to ensure the accurate calculation of taxes are important. When updates to tax regulations occur, the procedures are maintained at the same level by reviewing and updating them in a timely manner.

・The tax affairs of UK Subsidiary are handled by staff with necessary knowledge and training of UK tax details.

・Advice is sought from external professional tax advisers where appropriate.

Attitude towards tax planning

FUKUDA and the UK Subsidiary manages risks to ensure compliance with legal requirements in a manner which ensures payment of the right amount of tax. When entering into commercial transactions, the UK Subsidiary seeks to take advantage of available tax incentives, reliefs and exemptions in line with, and in the spirit of, tax legislation. The UK Subsidiary does not undertake tax planning unrelated to such commercial transactions.

The level of risk in relation to UK taxation

The level of risk which FUKUDA accepts in relation to UK taxation is consistent with its overall objective of achieving certainty in the UK Subsidiary’s tax affairs and fully complying with UK tax law. FUKUDA and UK Subsidiary understand the responsibility to ensure compliance with tax legislation and will not take part in any unethical behaviors. This principle applies to all activities related to UK tax laws and regulations. The Board of the UK Subsidiary will evaluate and identify tax risks based on the procedures stated in "Approach to risk management". This governance system will adapt to meet any external and internal changes in the future.

Relationship with HMRC

FUKUDA and the UK Subsidiary will maintain a relationship based on integrity with HMRC by ensuring all matters in relation to taxation are performed in accordance with the tax regulations. When there are significant new business transactions or changes in existing business transactions, FUKUDA and the UK Subsidiary will always consider the tax implications at an early stage, and communicate with HMRC based on any relevant facts in a timely manner. FUKUDA and the UK Subsidiary will report any required information related to UK taxation to HMRC in a timely and appropriate manner.

List of entities covered by this Tax Strategy

FUKUDA DENSHI CO., LTD UK Branch

FUKUDA DENSHI UK LTD

Issue date 2019/12/01