How We Do Business

JT Group's Codes of Conduct

Our Codes of Conduct underpin how we do business across the JT Group. They outline our individual and collective responsibility to key stakeholder groups and to wider society.

All operations are required to comply with the high standards of business integrity laid down in the Codes. These include preventing bribery and corruption, avoiding discrimination, respecting human rights, environmental protection, data privacy, and fair competition.

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Our Tax Practices

We believe that taxes are both necessary and desirable, and we are committed to paying levels of taxation that are not only firmly within the letter and spirit of local laws but are in accordance with our responsibilities to all stakeholders in our "4S" model. We do not engage in aggressive and artificial tax planning or tax avoidance schemes, and never use legal entities for tax purposes only.

In 2015 we paid a total of 132,027 million Yen in corporate tax across the JT Group.

Our approach to tax is guided by an integrated Global Tax function that works across the JT Group to provide advice on tax issues and ensure appropriate payment of taxes. This function also manages a yearly compliance process in which business units must issue a detailed report, signed off by the Finance Director, to show they are meeting their local tax obligations.

We aim to be as transparent as possible on taxation, and to foster good relationships with tax authorities in order to reduce uncertainty or misunderstanding on both sides.

One of our key challenges is that tax legislation and practice in some territories, particularly in emerging markets, is often less clear than we would like it to be. This can easily translate into differences of opinion with authorities over the interpretation of tax regulations. We always try to solve these disagreements through active engagement.

Regulatory Landscape

An important topic for the JT Group over the next few years will be the OECD's Base Erosion and Profit Shifting (BEPS) Project, which aims to clamp down on tax planning strategies that artificially shift profits to low-tax or no-tax locations and reduce taxable base. Because we earn income only in countries where we have substantive business operations, we are confident that the JT Group is paying its fair share of taxes. However, we are still digesting the latest recommendations of the BEPS Project in order to understand the potential implications on the JT Group.

Information Security

The JT Group's information security risks lie in the damage or leakage of three types of key information:
1. Information we hold on customers, consumers, suppliers, and employees.
2. Information on our business strategy.
3. Engineering and experimental data, including results from our research.

To prevent confidentiality breaches, we must deter those who might want to compromise confidentiality, prevent possible incidents, detect breaches, and, if necessary, recover data as swiftly as possible.

We have laid down policies and procedures, including manuals, guidelines, and incident response processes, that help employees reduce risk, protect information, and respond to any attacks. And we regularly update and enhance our information security policies and procedures to take account of the rapidly changing landscape in this area.

Attacks on information security often occur because of carelessness, so we periodically conduct training to refresh information security knowledge defined in policies and procedures. And we update employees with advice on good practice so that we are able to prevent information security violations.

In addition, we make use of the latest technology, including monitoring and alert systems, to prevent and detect information security breaches. We also carry out periodic reviews of our information security technologies.

Information Security