Tax Governance
Approach and Policy
The SMM Group established and announced the Sumitomo Metal Mining Group Basic Policy on Taxes on April 1, 2021. Under this policy we comprehensively investigate and examine the relationships of its products to customers and local communities to develop business in a sustainable manner. as well as work toward the maximization of after-tax profit and free cash flow to maximize corporate value and achieve our long-term vision through sound corporate activities. A part of this, we also examine 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.
Tax-Related Decision Making and Management and Implementation Framework
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 Group has established, maintains, and effectively operates an internal control system for financial closing operations so that it can 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.
- The representatives of individual Group companies including the Company review and approve tax returns and payment details before filing and paying taxes. If a tax investigation 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, the practical procedures are 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.
Tax Compliance and Responses to Government
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).
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.
