FDUK (Branch.) Tax Strategy

Introduction

The UK branch (hereafter the 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 a division of FUKUDA under the corporate governance structure of FUKUDA. The UK tax strategy of the UK branch is in accordance with the tax policies of the FUKUDA group. This strategy applies to the UK 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. It also applies to FUKUDA DENSHI UK LIMITED (hereafter UK Subsidiary), which was established in April 2017, for future European expansion plans and is currently dormant. This strategy applies from the date of publication until it is superseded.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 branch 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 branch, 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 of the UK branch is the responsibility of the Board of FUKUDA.

・The tax affairs of the UK branch are delegated to the General Manager of the UK branch and reported to the Senior General Manager of International Sales of FUKUDA and the Accounting General Manager of FUKUDA.

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

・The Internal Control Department of FUKUDA is responsible for preventing risk from occurring and identifying potential risks at FUKUDA and the UK branch. Risk which is judged as significant is reported to the Compliance and Risk Management 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 risk from occurring, confirming the status of risk occurring and dealing with identified risk. There are regularly scheduled meetings of the Committee, and extraordinary meetings will be held when required.

Additionally, from the perspective of preventing 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 branch, behave in accordance with the Code of Conduct.

・FUKUDA and the UK branch office understand that the implementation and operation of procedures to ensure the accurate calculation of tax 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 the UK branch are handled by the appropriate FUKUDA Accounting Department staff, who have the required knowledge and skills.

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

Attitude towards tax planning

FUKUDA and the UK branch 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 branch seeks to take advantage of available tax incentives, reliefs and exemptions in line with, and in the spirit of, tax legislation. The UK branch 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 branch’s tax affairs and fully complying with UK tax law. FUKUDA and the UK branch understand the responsibility to ensure compliance with tax legislation and will not take part in any unethical behavior. This principle applies to all activities related to UK tax laws and regulations. The Board 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 branch office 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 its UK branch 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 its UK branch 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 2018/3/30