Compliance

To prevent corrupt practices, the KDDI Code of Business Conduct defines the principles of promoting fair business activities and the conscientious performance of duties and prohibits activities such as bribing politicians and public officials, along with other similar types of corruption.
Specifically, this includes any business entertainment, gift and invitation given to a public official in the course of business with governmental agencies that is prohibited under the National Public Service Act and other applicable laws and regulations.
KDDI has established that, when dealing with overseas governments and companies, employees will not provide any business entertainment, gift or invitation as stipulated in the UN Convention against Corruption as well as the laws and regulations of the relevant countries against foreign corrupt practices and unfair competition.
In addition to the above, we also stipulate the elimination of organized crime groups and prohibition of insider trading and anti-competitive behavior, and any violations will be punished in accordance with internal regulations. In order to prevent these violations, we use e-learning courses and e-mails to educate and inform all employees and raise their awareness [1]. In FY2021, there were no employees subject to disciplinary dismissal for violating the anti-corruption provisions of the KDDI Code of Business Conduct.

We also urge business partners to comply with the KDDI Group Sustainable and Responsible Procurement Guidelines, which defines rules for prohibition of corruption, bribery, abuse of power and giving or receiving illicit funds.

For any political donations we make, we observe the Political Funds Control Act and follow the KDDI Code of Business Conduct and the KDDI Group Sustainable and Responsible Procurement Guidelines.
In FY 2021, we made political donations totaling 6 million yen in Japan, and there were no cases of legal action against us concerning corruption or bribery.

We at KDDI Group pursue the satisfaction and benefits of our customers while fulfilling our social responsibilities not only by complying with international rules and applicable tax laws and regulations in all operating countries and regions, but also by complying with and following the spirit of the law and paying tax appropriately to engage in tax fairness, and thereby strive to maximize corporate value.
In fiscal 2021, we paid 331,957 million yen of corporate income tax, which accounts for 31.2% of gross income. KDDI Group submits the Securities Report after undergoing accounting audits by external accounting auditors and obtaining approval of the CFO (Executive Vice President, Representative Director/Executive Director, Corporate Sector) and the President.

The KDDI Group Tax Management Regulations have been established to ensure that the KDDI Group steadily implements the Basic Tax Policy in its actual business activities. KDDI Group companies are required to comply with the regulations. The regulations were established by KDDI and are overseen by the Chief Financial Officer.
Practical operations are transferred to KDDI's tax division, which reports to the CFO and the necessary meetings bodies when it becomes aware of significant events or risks related to the KDDI Group's tax affairs.

As KDDI Group businesses become increasingly multinational and have more international transactions, our top management, including the President, is working to develop and promote a tax strategy that properly recognizes international tax risks and regards such risk as an important issue that is directly linked to management, while utilizing external specialists to have a deeper understanding of the latest tax updates. In addition, the head office is engaged in education for employees across the world and receives tax practice support from external specialists. With these initiatives, we strive to maintain and improve tax governance. Also, with regard to the tax returns it prepares, KDDI has them reviewed by an external tax accountant corporation and obtains approval of the CFO before submitting them to the tax authorities.

To maintain the transparency of tax affairs, we prepare and submit an annual report on our activities by country in accordance with tax laws in Japan. We also work to build trust relationship with tax authorities in each country by conducting timely and appropriate disclosure of tax-related information, such as a business summary report on the overall status of the Group's activities in line with the relevant laws, regulations and disclosure standards of each country and region in which we operate. With these initiatives and prior inquiries as required, we strive to reduce tax risks.

In accordance with OECD's Action Plan on Base Erosion and Profit Shifting (BEPS), we are committed to ensuring proper tax payment in all operating countries including Japan, by aligning tax payments with the location of our economic activity and value creation, in line with the revision of tax regulations to tackle BEPS.
In particular, we handle transfer pricing taxation and anti-tax haven taxation, which are critical international taxation issues.