UK Tax Strategy
Published on the 23rd March 2018
Main businesses of Komatsu group “Komatsu” consist of manufacture, sale and service of construction, mining and utility equipment, forest machines and industrial machinery. Its headquartered company is Komatsu Ltd. Listed on the Tokyo Stock Exchange. Komatsu activities in the United Kingdom include manufacturing, distributing and servicing the above-mentioned machinery in the construction, mining and forestry sectors.
This UK tax strategy statement (the “Strategy”) sets out our approach to UK taxation and applies to all our entities, subgroups and permanent establishments in the UK (collectively “we”, “our” or the “UK Entities”). Our publication is regarded as complying with the obligation under Part 2 of Schedule 19 of Finance Act 2016 in respect of the period ending 31 March 2018.
The Strategy is aligned with the “KOMATSU Way” which is a written description of the company’s mind-set, values and beliefs. The KOMATSU Way is accompanied by Komatsu's Worldwide Code of Business Conduct (the “Code”). Our commitment to complying with the Code is not limited to laws and regulations but also those rules that are generally recognised and respected in society.
Tax governance and risk management
The Strategy is approved by the Boards or respective managements of all of the UK Entities and has been developed with the support and oversight of the International Taxation Group of Corporate Controlling Department in our head office in Tokyo.
The UK Entities are governed and managed independently of each other and have distinct Boards and management teams. They vary in size and complexity and as such, and the tax governance and risk management framework for each UK Entity is tailored accordingly. In all cases, however, there are appropriate Board oversight and effective channels for the monitoring and escalation of tax risks.
Our UK tax compliance obligations are delivered by a combination of in-house staff and professional advisors. In the case of complex technical matters or areas that require international co-ordination (such as transfer pricing), the UK Entities can also draw on specialist expertise of their respective divisions internationally or the International Taxation Group of Corporate Controlling Department in Tokyo. Staff training is tailored to meet the respective needs of the UK Entities and we maintain close relationships with advisors to ensure that we are up to date with applicable changes in tax law.
Tax planning and risk appetite
We believe that our corporate value is represented by the total sum of trust society and our stakeholders place in Komatsu. As such, we do not pursue aggressive tax strategies or artificial planning arrangements that could undermine that trust. We seek to minimise tax risks and prioritise compliance. Our intercompany transactions are made on an arm’s length basis in line with OECD principles.
Our UK Entities seek to maintain a collaborative, transparent and honest relationship with HMRC. In the rare cases where disagreements arise, we appropriately defend our positions which we believe to be correct. However, we will also invest the time and effort required to help HMRC better understand our business and the associated tax profile.