tax poliy

Tax Governance

Basic Stance

Based on the recognition that tax compliance is one of its indispensable social responsibilities, DENSO has established the DENSO Group Global Tax Policy. Guided by this policy, DENSO is actively promoting Groupwide efforts to enhance its tax compliance, including promoting educational initiatives for its employees and abiding by the rules of cross-border transactions.

Promotion Structure

Appointing the chief financial officer (CFO) and director as the person responsible for overseeing tax governance, DENSO works to establish, maintain, and improve tax compliance structures. DENSO also addresses tax risks when they occur and engages in tax planning. In addition, DENSO’s accounting department handles Groupwide tax practices.

DENSO Group Global Tax Policy

1. Enhancement of tax compliance

DENSO Group performs the activities below under the recognition that tax compliance is one of indispensable social responsibilities.

1) Training and Awareness activity for our associates
As stated in “Code of Conduct for DENSO Group Associates”, our associates must ensure proper accounting procedures and methods that are the basis of proper tax payment. The companies provide various opportunities such as seminars, e-learning, etc. in order for the associates to gain the necessary knowledge and skill level to meet appropriate tax compliance.

2) Abidance by the rules of cross-border transactions
Cross-border transactions are to be conducted in accordance with legislative regulations as set forth by the OECD in Transfer Pricing guidelines and Controlled Foreign Corporation rules for multi-national companies. DENSO’s philosophy is to meet those guidelines and rules in applying proper arm's length prices in cross-border transactions with our related group companies as well as preventing from profit shifting to a low-tax country.

3) Relationships with tax authorities
Tax payment is to be properly executed in each country where DENSO Group does business. The companies promptly provide information and implement countermeasures on tax issues addressed by the tax authorities.

2. Execution of proper and reasonable tax planning

DENSO Group endeavors to utilize tax incentives with deep understanding of their intent and conditions. The companies will not do that under the purpose of tax reduction in a country where DENSO Group is not doing business.

DENSO Group works on various tax activities under this policy, which is led by the tax teams in cooperation with the tax authorities and external advisors.

Tax amounts by region

Fiscal 2021 (Billions of yen)

  •   Tax amounts
    Japan 29.5
    North America 3.1
    Europe 1.7
    Australia 25.1
    Other 2.8
    Total 62.2

Future Initiatives

Going forward, we will ensure that we maintain a proper understanding of the various tax-related laws and rules in each country and region of operation, as well as the spirit of such laws and rules. We will also strive to improve our tax compliance and engage in highly transparent tax accounting in order to appropriately fulfill our tax obligations. Furthermore, we will contribute to the development of local communities and the enhancement of DENSO’s corporate value through tax planning and the appropriate use of tax incentives.