Tax Compliance

Basic Approach

Taiho Pharmaceutical is a member of the Otsuka group and operates worldwide. We recognize that paying taxes in accordance with the laws and regulations of each jurisdiction concerned helps to support the economies in which we operate. In the area of tax compliance, all members of the Otsuka group adhere to the Otsuka Group Global Code of Business Ethics.

Approach

As an Otsuka group member, Taiho Pharmaceutical conducts its business activities in accordance with the Otsuka Group Global Code of Business Ethics. The company also complies with all applicable tax policies, laws, and tax treaties in the countries where it operates, as well as with international taxation rules. We do not engage in activities aimed at tax avoidance and we ensure proper tax filings and payments in each jurisdiction. Moreover, we strive for transparency and work to build trust with tax authorities by disclosing information appropriately. As tax management becomes increasingly complex with ever greater globalization, we are continuously updating our knowledge while consulting tax experts as necessary, and taking appropriate actions to minimize tax risks.

Engagement with Tax Authorities

We continually work to build constructive relationships with the tax authorities in locations where we operate. Economic globalization and digitalization have led to the promotion of fundamental revisions to international taxation rules, particularly by the Organization for Economic Cooperation and Development (OECD). Accordingly, we are committed to continuously improving the reliability of our tax-related data and establishing systems to quickly deliver such information.

Transfer Pricing Policy

Taiho Pharmaceutical calculates its transfer prices based on the OECD Guidelines, which are designed to prevent double taxation and ensure the fair application of transfer pricing regulations across different countries. We strive to ensure that transactions with affiliates are conducted at appropriate prices. We report relevant corporate information using the standard formats provided by the OECD. We also utilize Advance Pricing Agreements (APAs) as necessary with tax authorities to pre-determine the suitable transfer pricing method.

Governance Related to Taxation

Taiho Pharmaceutical’s Finance & Accounting Department understands that maintaining and improving taxation governance helps to improve corporate value, and is therefore dedicated to ensuring this. Accordingly, the department actively engages with relevant organizations within the company and its subsidiaries. The aims are to ensure collaboration, while recruiting and developing appropriate personnel, and to establish a group-wide system that enhances tax compliance and reduces tax risks. Finally, the department is responsible for explaining the implementation and maintenance of tax policies and procedures to the Board of Directors and the Audit & Supervisory Board Members.