Tax Governance
Approach and Policy
The SMM Group comprehensively investigates and examines the relationships of its products to customers
and local communities to develop business in a sustainable manner. Through sound corporate activities,
we work toward the maximization of our after-tax profit and free cash flow to maximize corporate
value and achieve our long-term vision.
As part of this, we also examine matters in terms of taxation, such as the status of tax treaties with countries
where mines or plants are located, areas near key customers and markets, and countries where we do
business. By continuing to comply with international tax standards and other related matters, and by fulfilling
our tax filing and payment obligations appropriately and fairly, we will strive to coexist with local
communities and countries where we do business.
The Sumitomo Metal Mining Group’s Basic Policy on Taxes, established and announced on April 1, 2021
with the approval of our Board of Directors, is based on this approach.
Decision-Making Concerning Taxes, Oversight by the Board of Directors, and the Role of Audit & Supervisory Board Members
At SMM, an executive officer is responsible for the Finance & Accounting Department, which is in charge of taxes. The officer manages
and oversees the daily execution of tax-related duties that are performed by the department staff.
We work to improve and operate our tax governance system, with the president and the Board of Directors playing roles as
noted below.
- The Company has established, maintains, and effectively operates an internal control system for financial closing operations that enables the Group to conduct appropriate accounting work, reporting of results, and other tasks, including tax-related matters. The Internal Audit Department evaluates the effectiveness of the internal control system, and reports the results to the president.
- Tax filing and payment in the Group are handled at the level of individual companies, after confirmation of content by representatives of the companies. The Company files and pays income and other taxes as a company after approval by the president. When a tax audit is conducted, the executive officer in charge of the Finance & Accounting Department reports on the progress of the audit to the president. In cases in which additional payments or tax refunds arise due to differences with tax authorities in interpretations or opinions concerning laws and regulations, the matter is handled with the approval of the president.
- When making decisions on matters such as investment projects, the Group conducts examinations that include tax-related matters and risk assessments. Particularly important projects are taken up by the Board of Directors for approval.
The Audit & Supervisory Board members ensure the appropriateness of tax-related practices and policies through the following roles.
- Audit & Supervisory Board members verify the appropriateness of financial closing operations, including tax calculations and tax effect accounting, through audits conducted by the independent public accountant. In addition, when necessary, they pose questions to the independent public accountant to clarify tax-related issues.
- Audit & Supervisory Board members receive reports from the internal audit department and the independent public accountant regarding the results of their evaluation of the effectiveness of the development and operation of the internal control system for financial closing operations, including tax-related matters, and subsequently review the contents of the reports.
- When the president approves the filing and payment of income or other taxes on behalf of the Company, the Audit & Supervisory Board members review the documentation to confirm that filings and payments are properly managed within the Company.
- When the president approves the development of a tax policy, the Audit & Supervisory Board members review the documentation and confirm that the tax policy is properly developed within the Company.
Initiatives for Tax-Related Compliance
Compliance* is the cornerstone of the Group’s corporate activities. In accordance with the Sumitomo Metal Mining Group’s Basic Policy on Taxes, the SMM Group endeavors to adhere to tax laws, tax treaties, and other relevant laws and regulations applicable in the countries and regions where its mines or plants are located. Additionally, the Group follows tax-related standards published by international organizations such as the Organisation for Economic Co-operation and Development (OECD). As part of these efforts, we not only ensure our operations comply with laws and regulations, but also provide education and training to our staff.
Tax-Related Information Collection and Initiatives Involving Government, etc.
Through our activities as a member of the Japan Mining Industry Association, we make inquiries, collect information on, and
express opinions to governmental agencies with regard to matters such as industrial policy and tax reform.
When the Group encounters issues involving interpretations of laws and regulations or specific procedural matters, we work to
properly carry out tax-related matters through prior inquiries and consultations with tax authorities and outside experts.
