Corporate Policy

Asahi Group’s Tax Code of Conduct

Tax, and in particular international tax, is an important issue for Asahi Group and for our stakeholders. The tax we pay plays a key role which may have a wide impact on economies and societies, and is an important factor in the development of regions in which we operate.
We consider the payment of taxes to be a means of making a contribution to society. A large portion of our tax payments comprise alcohol taxes, excise duties, corporation tax, and withholding taxes on income relating to employees.

The purpose of our Tax Code of Conduct is to ensure appropriate conduct of tax affairs with regard to tax management and tax transparency, while balancing the interests of our various stakeholders. The Tax Code of Conduct sets out the fundamental thinking of the Asahi Group towards the conduct of tax affairs, and its implementation is assured by a set of guidelines and procedures that apply to Asahi Group companies and their employees.

Tax Principles

Tax governance

The Asahi Group tax governance is conducted on the basis of a set of guidelines and procedures. These explain the characteristics of strategy, policy and operations pertaining to taxation, and prescribe management procedures. It is obligatory for Asahi Group companies and their employees to comply with these procedures. The Tax Code of Conduct is laid down and managed by the Tax Planning Team.

The Tax Planning Team is supervised by the chief financial officer(“CFO”), who is a director and member of the group’s Corporate Strategy Board.
The Tax Code of Conduct is continuously reviewed and is revised in the light of factors such as changes within the group or in tax legislation.

Responsibilities and organization of tax function

Handling tax is part of the group’s finance function and is the managerial responsibility of the CFO. Day-to-day work is assigned to the General Manager of the Finance Section at group head-office and in-house tax specialists.
As we become a more globally oriented company and implement strategies appropriate to this, the Tax Planning Team has been putting in place a structure to enable direct reporting and management both domestically and globally. This leads to better policy implementation, tax-risk management, and human-resource

development and growth. It also makes it possible to gain an all-encompassing grasp of tax matters right across the group and to ensure a consistent flow of comprehensive information to the General Manager of the finance section. The General Manager reports directly to the CFO.
Advisory and technical tax support is provided by major tax firms, legal firms, and other small firms as appropriate for the nature of the services required.

Compliance

We fulfil our global tax obligations in full compliance with all local and international tax laws and Organisation for Economic
Co-operation and Development (OECD) guidelines.

We observe the tax laws that apply in each country, taking into consideration not only the letter of the law but also the legislative intent underlying the laws.

Transparency

Amid the mounting interest in the tax policies of multinational companies, we disclose our Tax Code of Conduct and tax-related

information by communicating them in a readily understandable, timely, and highly transparent manner.

Transfer pricing

The majority of our business consists of the production and sale of local brands. Therefore, the level of cross-border transactions is low within the group in comparison with those of many other multinational companies.
We aim to pay appropriate amounts of tax in jurisdictions where we operate based on the value which is created during the conduct of our business activity.
We aim to act in compliance with both the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations and with local tax laws in each country. This compliance is supported by our Regulations for Tax Affairs Policy.

We follow the arm’s-length principle which has been adopted by most countries. This requires that prices in cross-border transactions within the group are determined within an appropriate arm’s-length range and that the transactions are dealt with in accordance with the requirements of local laws and regulations.
Many of our operating companies are required to provide separate related-party transaction or transfer-pricing schedules to local tax authorities. These are classified as transfer-pricing documents, and in many countries it is obligatory to prepare and file them. The Asahi Group fulfils the obligation of transfer-pricing documentation.

Structure and planning

We attach most importance to our business activity, and we undertake effective planning for the conduct of that business activity. Accordingly, all tax planning that we implement is linked with a business purpose. Our tax planning is conducted in a manner that strikes a balance between cost-saving in accordance with the

legislative intent underlying the laws and contributing to society.
We do not use abnormal tax structures that are intended for tax avoidance, have no commercial substance, or do not accord with the spirit of local and international laws.

Tax havens

We do not use tax havens for the purpose of tax avoidance.
The Asahi Group has approximately 300 subsidiaries and affiliated companies, among which only two companies are located in a jurisdiction deemed to be a tax haven. One is a holding company in which we acquired a partial stake in order to engage in a joint-venture business and which was already in existence when we

acquired the stake. The other is a human resource management company acquired in connection with the acquisition of an existing corporate group.
When considering the location of any new business activity, we take all factors into account, including taxation, but fundamentally it is the business factors that are the basis for making decisions.

Uncertain tax positions and tax rulings

Cases which involve uncertain tax positions may always arise for the Asahi Group. If these issues are left unresolved, they may affect the amounts of tax to be borne, deferred tax assets and/or liabilities, and current tax liabilities.
The Asahi Group policy in this area is to adopt a conservative approach. When reaching decisions on how to deal with these issues, we evaluate the validity of possible approaches and the

magnitude of the various risks involved, and make appropriate decisions and provisions.
We address these matters by engaging experienced personnel, taking professional advice, applying the Tax Code of Conduct, and reporting on the issues to the Tax Planning Team.
In order to reduce the degree of uncertainty of tax position, we disclose the facts to the tax authorities and request a ruling.

Tax incentives

In most of the territories in which the Asahi Group operates, the territory's economic situation and growth strategy dictate how government policy develops and modifies tax systems, and a large number of territories have introduced various kinds of tax incentives. The Asahi Group companies endeavor to enhance tax efficiency by making use of any available tax incentives to the extent that they fall within the scope of normal business activity. Tax incentives often

include tax holidays, the application of special tax rates, accelerated depreciation, and the application of tax treaties for business activity in specified areas.
Territories generally introduce tax incentives to attract business and investment. It is true that such tax incentives may affect our business decision-making, but they are only one of the many economic factors that we take into consideration.

Relationship with tax authorities

We endeavor to establish good relationships with the tax authorities and to maintain them.
However, in the course of engaging in various business activities, we may have opinions which differ from those of the tax authorities. In such cases, the Asahi Group actively seeks opportunities for

dialogue with the tax authorities and endeavors to resolve differences.
In the event that double-taxation issues arise, we may obtain the cooperation of tax authorities in addressing them.