SHIONOGI Group Tax Policy
SHIONOGI Group (Shionogi & Co., Ltd. and its Group companies, collectively “SHIONOGI”) has SHIONOGI Group Heritage, which was first instituted in 1957, which sets forth the purpose of SHIONOGI’s corporate activities as being “to strive constantly to supply the best possible medicine to protect the health and wellbeing of the patients we serve”.
As a responsible, growing company, SHIONOGI recognizes that a robust compliance framework is an essential component in achieving its business objectives. To this end, all of SHIONOGI’s officers and employees strive to maintain and improve compliance through raising their internal awareness. This is grounded in the principle of not only acting in compliance with relevant laws, rules and regulations in the territories in which SHIONOGI operates, but also considering and understanding the ethical and societal impact of SHIONOGI’s actions.
Reflecting SHIONOGI’s commitment towards compliance, SHIONOGI has implemented the following fundamental tax policy globally.
The Corporate Officer in charge of Finance and Accounting appointed by the Board of Directors is accountable to the Board of Directors and the Audit and Supervisory Board for the implementation and maintenance of both tax operations that comply with this Policy and the Policy itself.
As SHIONOGI continues to expand its business and global presence, tax matters in corporate management are becoming more important. In the SHIONOGI's tax governance, Head of Finance and Accounting and the department in charge of tax affairs in Shionogi & Co., Ltd lead tax management under the responsibility of the Corporate Officer in charge of Finance and Accounting. The Head of Finance and Accounting has implemented a framework that allows for the timely prevention of unforeseen tax matters, and established and maintained a cooperation network of direct or indirect reporting through the department in charge of tax affairs which facilitates the management of local and international taxation matters.
As the international tax landscape continues to change, SHIONOGI will strive to remain in compliance with all applicable tax laws and regulations by understanding both the spirit of the law and the purpose of the legislation, and will contribute to societal development through tax payment based on appropriate tax compliance.
At SHIONOGI, the department in charge of tax affairs in Shionogi & Co., Ltd strives to understand the tax issues of the entire group and appropriately manages tax risks. We will consider countermeasures against tax risks and strive to take appropriate measures while cooperating with the department in charge of tax affairs in each country or region as well as external tax experts if necessary. In the event that a serious tax risk arises, timely reports will be made to the Corporate Officer in charge of Finance and Accounting, the president and the board of directors, if necessary.
SHIONOGI regularly monitors the status of tax matters and tax reforms in order to minimize any tax exposure, including unexpected tax costs and controversy in a rapidly changing international tax landscape. SHIONOGI reviews all business matters with a tax implication on a regular basis and identifies those areas of tax uncertainty that need to be addressed going forward.
In addition, SHIONOGI understands that the BEPS (Base Erosion and Profit Shifting) project by the OECD is an important initiative to ensure tax transparency and prevent international tax avoidance. SHIONOGI supports this initiative and pays appropriate taxes in all countries and regions where we operate.
2. Our business activities
SHIONOGI is engaged in research, development, manufacturing and marketing activities to supply the best possible medicine to protect the health and wellbeing of patients worldwide. To ensure that the SHIONOGI’s tax positions appropriately reflect these commercial and economic activities and objectives, and to enable efficient tax management, SHIONOGI formulates a timely and effective tax strategy.
In implementing our tax strategy, the department in charge of tax affairs is closely aligned with our business activities to ensure that tax management based on compliance remains a core part of transactions entered into by SHIONOGI. Conscious of SHIONOGI’s commitment to corporate social responsibility and striving to make appropriate tax payments in each region and country in which SHIONOGI operates, SHIONOGI does not engage in artificial tax arrangements, and seeks to manage tax matters appropriately in the territories in which SHIONOGI operates. Also, by appropriately utilizing tax incentives and grants, we strive to achieve both corporate growth and contribution to a sustainable society.
3. Initiatives related to international taxation
SHIONOGI supports the OECD's BEPS (Base Erosion and Profit Shifting) project, which is an important initiative to ensure tax transparency and prevent international tax evasion, and will pay taxes appropriately in each country in which SHIONOGI operates. In particular, we understand the purpose of global minimum taxation, which is one of Pillar Two model rules of BEPS2.0, and support this initiative.
As a multinational company, SHIONOGI ensures a proper allocation of international income according to the contribution of SHIONOGI Group companies on an arm’s-length basis. SHIONOGI also ensures tax compliance in each country in which SHIONOGI operates, by determining transfer pricing in accordance with current OECD principles and does not intentionally set transfer pricing for the purpose of transferring profits to low-tax countries
SHIONOGI maintains required transfer pricing documentation in each jurisdiction where this is necessary. Moreover, to address unforeseen transfer pricing matters from arising under particularly complex transactions involving multiple jurisdictions, SHIONOGI obtains prior agreement between the relevant tax authorities through APAs (Advance Pricing Agreements), if necessary.
SHIONOGI does not carry out tax planning intended to avoid taxes, such as the use of tax havens by entities with no business purpose or substance.
In addition, if it is necessary for business execution, when investing in a country with low taxation or when the tax rate is reduced due to the revision of the law of the country in which SHIONOGI operates, it will be determined whether or not the anti-tax haven tax system is applied according to the provisions of laws and regulations. As a result, if we are subject to the anti-tax haven tax system, we will properly file and pay taxes.
4. Relationship with tax authorities
SHIONOGI makes efforts to ensure transparency and reliability of reporting of taxation matters, in good faith, to the tax authorities of the countries in which SHIONOGI operates.
SHIONOGI seeks to ensure transparency, both by publishing and following this Tax Policy and by complying with local and global transparency standards, including local disclosure requirements as well as Country-by-Country Reporting (“CbCR”) standards.
SHIONOGI shall seek to ensure clarity in areas of tax uncertainty, by obtaining advanced clearance from tax authorities as needed.
March 19, 2018
March 20, 2023
- ※Our global tax policy is approved by the Board of Directors on the above date, and is implemented across the Shionogi Group.