Tax
Olympus Group Tax Policy
Introduction
Our Corporate Philosophy and Global Code of Conduct set out the legal and ethical principles that we apply to our business and defines our relationships with all of our stakeholders, which includes tax authorities. Our Corporate Philosophy, “Our Core Values”, includes Empathy and Integrity. We earn trust and empathy with patients, customers, healthcare professionals, authorities and the communities with integrity in all aspects of our operations, and “Our Core Values” governs the way we operate our business.
Group Tax Policy
This Group Tax Policy outlines the principles of how Olympus people are expected to operate with respect to tax matters. The Policy is set out in detail below.
1. Compliance with laws, rules and regulations
Olympus is committed to observing all applicable tax laws, rules, regulations, and reporting and disclosure requirements, wherever there is a requirement to do so as a result of our business presence and transactions, in line with “Our Core Values”, “Integrity”, as described in the Corporate Philosophy and Global Code of Conduct.
A dedicated tax function (Group Tax) collaborates with the Group’s businesses to provide advice and guidance necessary to ensure compliance, obtaining external advice where necessary. There are clear management responsibilities, backed up by regular monitoring and review, carried out by members of Group Tax with the necessary experience and skill set and where necessary support is provided by external professional advisors.
2. Consistency with Group strategy
Tax decisions are made at all times in a manner which is consistent with and complements the Group’s overall business strategy. Key business decisions are made cognisant of the tax consequences. Group Tax partners with the businesses to ensure there is consistency.
3. Governance, Assurance and Tax Risk Management
Responsibility and accountability for the Group’s tax affairs is clearly defined in accordance with a Tax Responsibility Matrix, and decisions are taken at an appropriate level, determined by formal Group Delegation of Authority including Board approval.
Diligent professional care and judgement are employed to assess tax risks in order to arrive at well-reasoned conclusions on how the risks should be managed. Olympus has a conservative approach to tax risks and seeks to mitigate tax risks as far as possible. Where there is uncertainty as to the application or interpretation of tax law, appropriate written advice evidencing the facts, risks and conclusions may be taken from third party advisers to support the decision-making process.
In reviewing the risks of a tax action or decision, the following would be considered
- The legal and fiduciary duties of directors,
- The requirements of our Group compliance and ethics policies,
- The maintenance of corporate reputation, having particular regard to the principles regarding the way we interact with the stakeholders around us, embodied in the Group’s approach to the stakeholders as described in the Corporate Philosophy of Olympus, “Empathy”,
- The tax benefits and impact on the Group’s reported result comparative to the potential financial costs involved, including the risk of penalties and interest,
- The wider consequences, as a double taxation where a specific income is taxed by multiple countries, of potential disagreement with tax authorities, and any possible impact on relationships with them.
Group Tax employs various risk management processes and systems to provide assurance that the requirements of the Group Tax Policy are being met. This includes compliance and risk monitoring systems and internal audit reviews of tax compliance activity across the Group.
4. Relationships with tax authorities
Olympus is committed to the principles of openness and transparency in its approach to dealing with tax authorities wherever we operate around the world. Where there is uncertainty as to the application or interpretation of tax law, we secure certainty by consultation with advance information disclosure. All dealings with the tax authorities and other relevant bodies are conducted in a collaborative, courteous and timely manner. The aim would be to strive for early agreement on disputed matters, and to achieve certainty wherever possible.
5. Tax Planning
Olympus pays its fair share of taxes in the countries where it operates, and considers this a part of its contribution to community. Olympus does not undertake aggressive tax planning or artificial tax arrangements such as profit allocation to law tax jurisdictions or tax haven and restructuring scheme without economic reason for tax avoidance. Olympus maintains and follows a transfer pricing policy that is based on OECD Transfer Pricing Guidelines and the Base Erosion and Profit Shifting (“BEPS”) Action Plan which is the international framework to prevent cross-border tax avoidance activities. Also, Olympus applies intragroup transaction pricing, or Transfer Pricing, which complies with the Arm’s Length Principle. In particular, Olympus adhere to the principle that profits should accrue where economic value is created and that tax follows business reality and is underpinned by business substance.
6. Incentives and reliefs
Olympus believes that it should pay the amounts of tax legally due in any territory. There will, however, be circumstances where this amount may not be clearly defined, or where alternative approaches may result in differing tax outcomes. The Group uses its best judgement in determining the appropriate course of action, using available reliefs and incentives where possible for tax cost optimization.
Country-by-Country Reporting
Introduction to country-by-country reporting
The Organisation for Economic Co-operation and Development (OECD) developed and implemented Country-by-County Report (CbCR) in 2017 as the BEPS Action, and all large multinational enterprises are required to file reports with tax authorities. Under OECD rules, CbCR is prepared using aggregated financial data. It is therefore not always possible to draw conclusions about a single entity, business or venture.
As stated in the group tax policy, Olympus follows the BEPS Action Plan. In this report, we disclose our CbCR data for countries and locations in which we have a taxable presence and where we report financial figures.
We share more information about our presence and purpose in each country and location.
The data source is the group consolidation reporting data. This means that the data is based on the International Financial Reporting Standards (IFRS) and the currency is Japanese yen. CbCR reports are not subject to an external audit, statement or opinion.
Definitions
Revenues
Revenues are a sum of the revenue, other income, finance income. The revenues include revenue to affiliated and third parties. However, it excludes dividends received from affiliated companies.
Profit (loss) before tax
Profit before tax is incurred in the relevant fiscal year from business activities in the Olympus group. However, it excludes dividends received from affiliated companies.
Income tax paid
This is corporate income tax paid in the fiscal year. However, it excludes withholding taxes for dividends received from affiliated companies. It may include payments made in relation to previous years or future years as tax payments are often made in arrears or in advance.
Income tax accrued
Income tax accrued is related to the activities in the relevant financial year and it does not include deferred taxes in accordance with the OECD CbCR guidance and withholding taxes for dividends received from affiliated companies.
Accumulated earnings
Accumulated earnings reflect the profits that are retained.
Number of employees
This is the number of employees at the end of the year.
