Governance

The Aisin Group asserts that maximizing corporate value requires that management be conducted in a way that is trusted by all stakeholders and is equitable and highly transparent. Accordingly, we are constantly enhancing our corporate governance.
As a global enterprise, the Aisin Group recognizes that proper tax compliance based on laws and regulations in each jurisdiction where it operates plays a vital role in developing our host nations and territories. We acknowledge that ensuring tax transparency is one of our corporate social responsibilities.
The Group is enhancing its tax-related corporate governance procedures to promote timely and appropriate responses to trends in international tax frameworks and tax system reforms in various countries and regions. We are committed to maintaining and improving tax compliance, reducing tax risk, and minimizing the cost of taxation.

Compliance with laws and regulations

As a trusted corporate citizen in the international community, the Aisin Group complies with tax-related laws and regulations in each country and region where it operates and is committed to paying taxes properly and on time. Moreover, within the scope of legitimate business activities, the Group works to minimize its tax expenditures by utilizing available preferential tax systems and by other means.

International tax framework

The Aisin Group understands that international initiatives such as the OECD's Base Erosion and Profit Shifting (BEPS) project are crucial to preventing international tax avoidance and ensuring tax transparency. We comply appropriately with the international tax framework.

Tax planning

The Aisin Group understands that arbitrary tax avoidance through tax planning lacking legitimate business purposes or substance, or the use of tax havens, hinders proper tax payment and the assurance of tax transparency in each country and region.
The Aisin Group conducts business appropriately and rationally. Our efforts to develop our business and build a global organization align with our commercial objectives and do not tolerate arbitrary tax avoidance using tax havens or tax planning that abuse the regulations.

Transfer pricing

The Aisin Group complies with the OECD’s Transfer Pricing Guidelines and sets transaction prices between group companies based on the arm's length principle. We strive to pay taxes in the appropriate jurisdiction and in appropriate amounts based on value added through our business activities. Moreover, based on analyses of each group company's functions, assets, and risks, we regularly evaluate whether profit allocation is appropriate and commensurate with their contributions. We also strive to maintain transfer pricing documentation in accordance with tax laws and regulations.

Relationship with tax authorities

The AIS Group strives to build sound and cooperative relationships with tax authorities in each country and region by submitting tax information in a timely and appropriate manner, based on the tax-related laws and regulations of each country and region and the requests of tax authorities.
In cases of differing interpretations with tax authorities or instances of double taxation, the Aisin Group responds professionally and in good faith, working to resolve issues reasonably and transparently in accordance with tax laws and regulations. Moreover, the Group employs measures to prevent the recurrence of any incidents in regard to which guidance has been received from tax authorities.

Reducing tax risks

When transactions subject to unclear tax interpretations arise in the course of business, the Group seeks professional advice and, when necessary, proactively consults with tax authorities in relevant countries and regions to resolve problems swiftly. In the case of cross-border transactions, the Group comprehensively weighs transaction volume and risk and uses advance pricing agreements for significant transactions to reduce tax risk.

Tax governance structure

To ensure a timely and appropriate response to changes in the business environment and tax reforms in various countries and regions, the Group designates the chief administrative officer / director as the ranking officer responsible for tax matters. Under this officer’s direction and supervision, the Accounting Department oversees tax operations and tax risk management for the entire Aisin Group. Furthermore, the Accounting Department works closely with Aisin Group companies and other business units to share information. When necessary, it employs external advisors for help with technical tax matters, establishing a framework to ensure tax-related laws and regulations are interpreted accurately.
Furthermore, for significant decisions, the Accounting Department assesses tax risk before submitting its findings to the meeting of the Board of Directors or Management Committee for approval. It also regularly reports the status of tax governance to Audit & Supervisory Board, thereby strengthening the tax governance framework.

Employee education and awareness activities

Based on the “Aisin Group Sustainability Charter,” the Aisin Group continuously conducts education and awareness activities for employees through training and e-learning on tax compliance. This ensures that both management and each employee can practice appropriate tax handling.

Shintaro Ito
Member of the Board of Directors and Chief Administrative Officer
AISIN CORPORATION
February 3, 2025

Reference material: AISIN Group corporate tax amounts by region

The AISIN Group discloses corporate taxes paid in its Annual Securities Report and also explains any factors that contribute to a difference between the statutory effective tax rate and the actual tax burden.