Tax practices

In accordance with our responsibilities to all stakeholders in our 4S model, we are fully committed to paying our fair share of taxes within both the letter and spirit of local laws. This commitment ensures that our tax affairs remain transparent and sustainable on a long-term basis; we therefore do not engage in aggressive tax planning or tax avoidance schemes. We never use legal entities for tax purposes only, nor do we undertake any transactions whose sole purpose is to reduce our tax contribution.

This approach is spearheaded by our experienced in-house global tax team. The team ensures that all departments and geographies adhere to our global tax policy and that appropriate expert advice is sought on all commercial and financial decisions. Furthermore, the global tax team provides guidance to other departments, and issues detailed annual reports showing how we meet local tax obligations. In addition, experienced local tax resources are embedded in the finance teams in our key tax jurisdictions.

When taking operational or financial decisions impacting the JT Group or its stakeholder groups, our management takes into serious consideration the impact on tax affairs, to ensure compatibility with our 4S model and global tax policy.

In 2016, the U.K. introduced a law that requires large U.K. businesses to publish an annual tax strategy which sets out, among other things, the approach towards tax planning and how tax risk is managed. Our tax strategy and global tax policy, which are on our website, describe our statement on U.K. tax strategy in more detail.

JTI UK Tax Strategy

Our tax practices

Our tobacco business is subject to substantial taxation, including tobacco excise taxes, which is paid at the point of sale and which we pass on to governments. Out of the 7,581,071 million Yen gross revenue we generate, 64% flows back to society through taxation which includes income taxes. In 2019, we paid 4,750,416 million Yen in tobacco excise taxes, amounting to 63% of global revenues; and 114,799 million Yen in current income taxes (corporate tax), accounting for a further 1% of revenue.

In recent years, tax legislation and practice have become increasingly complex. This complexity brings inherent tax risks. We try to nurture good relationships with tax authorities in order to increase certainty on both sides and to facilitate an open and constructive discussion, where appropriate.

Read more about the JT Group Tax Policy.