KDDI recognizes that promoting awareness of rules is a fundamental management issue for enforcing a corporate code to fulfill its social responsibility in addition to observing laws and regulations. As a global corporation, KDDI is working to enhance its compliance systems throughout the entire Group.
To provide a guideline for employees to act ethically and with an awareness of compliance, KDDI has established the KDDI Code of Conduct, and published it on our intranet to ensure employees are familiar with and act in accordance with it, making it available so that anyone can refer to it when dealing with doubts about their own judgement.
The Company has also put in place the KDDI Group Business Ethics Committee to deliberate and make decisions on compliance related items. The KDDI Group Business Ethics Committee is headed by the vice chairman, representative director, and comprises committee members including directors and other people that the chairman appoints as necessary. The committee meets semi-annually to ascertain the situation at each company and support the establishment and reinforcement of compliance structures. The KDDI Group Business Ethics Committee is also in charge of matters related to the helpline, preventing corruption, and compliance infringement such as violation of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade.
The KDDI Group Business Ethics Committee also formulates policies for educational activities and, in the event a compliance violation occurs, discloses information outside the Company and deliberates on measures to prevent recurrence. The status of the committee's activities is made available to all employees via the intranet.
We established the Business Ethics Helpline in 2006 to serve as a contact point for all employees of KDDI, KDDI Group companies and business partners who have questions or concerns about business ethics and legal compliance, including those associated with human rights issues.
In the fiscal year ended March 31, 2020, we received 469 reports and inquiries, but there were no reports of serious issues that lead to disciplinary action or require external announcement.
The KDDI Group Business Ethics Committee conducts investigation of the issues reported as required while protecting privacy, and when the problems are detected, the committee members as well as the management team and the Audit & Supervisory Board members receive the report and take corrective actions along with measures to prevent recurrence.
- KDDI's multilingual helplines receive anonymous consultation or reporting via e-mail or phone call in accordance with the Whistleblower Protection Act
- Reports that the external contact point received are delivered to the internal contact point, keeping anonymity for the whistleblowers unless they agree to be named
We at KDDI Group pursue the satisfaction and benefits of our customers while fulfilling our social responsibilities by maintaining and enhancing the international tax compliance and paying tax appropriately, adhering to international rules and tax-related laws and regulations in each country and region. In fiscal 2020, we paid 325,298 million yen of corporate income tax, which accounts for 31.9% of the gross income.
As KDDI Group businesses become increasingly multinational and have more international transactions, our top management is working to promote a tax strategy that properly recognizes international tax risks and regards it as an important issue that is directly linked to management. In addition, the head office is engaged in education for employees across the world and receives technical tax practice support from external specialists. With these initiatives, we strive to maintain and improve tax governance.
Efforts to Establish Good Relations with Tax Authorities
In an effort to reduce tax risks, we improve the transparency of our tax practices by submitting appropriate information and checking the appropriateness of our tax practices with tax authorities in advance as required, building trust with tax authorities in each country.
Efforts to Prevent Tax Avoidance
In accordance with OECD's Base Erosion and Profit Shifting (BEPS) action plans, we conduct responsible taxation by ensuring that our economic activities and value creation occur in the right tax payment places in line with the revision of tax regulations stipulated in BEPS. We also prevent transfer of sources of tax revenue to tax free or low tax rate countries and regions (so called" tax havens") with the purpose of excessive tax avoidance and work to make proper tax payments in accordance with each country's tax system.
The KDDI Code of Business Conduct defines rules that prohibit anti-competitive behaviors, and we make efforts to ensure that all employees comply with competition laws.
In addition to competition laws, we stipulate that local laws and regulations in each country and region on labor, tax, the environment, monopoly and consumer protection must be examined thoroughly to ensure full compliance.
Under the KDDI Guidelines for CSR in Supply Chain, we demand our business partners not engage in any activities that inhibit fairness, transparency or freedom of competition.
However, in March 2020, KDDI and UQ Communications became subject to administrative guidance issued by the Ministry of Internal Affairs and Communications as their sales agencies were alleged to engage in improper sales practices involving excessive price discounts on cellular phone terminals in violation of upper limits stipulated by the Telecommunications Business Act.
In line with this administrative guidance, the ministry demanded that thoroughgoing measures, including the provision of proper instructions to agencies, be taken to prevent recurrences.
In response, we are currently undertaking such initiatives as providing all agencies with follow-up explanation of the revised Telecommunications Business Act, implementing online training for agency staff, and mandating that agencies appoint managers in charge of compliance with legal guidelines.
Excepting the issues reported above, there were no legal actions against us concerning anticompetitive or monopolistic conduct in the fiscal year ended March 31, 2020. We will fully adhere to relevant regulations and continue appropriate business operations.
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