Compliance

KOKUSAI ELECTRIC CORPORATION (“KE”) and its group companies (“KE Group Companies”) (collectively referred to as "KE Group") are committed to “strengthening governance system (enhancement of corporate governance, thorough compliance, thorough management of critical business risks, ensuring transparency in management) toward realizing sustainability management” as one of the priority issues (materiality) to be addressed through the business activity, based on KOKUSAI ELECTRIC Way, KE Group's corporate philosophy. Compliance for KE Group shall be taking the correct action as a company or individual that is trusted by society in light of corporate ethics, considering observing laws, regulation and the article of incorporation as a matter of course. With regard to taxation, KE Group shall strive to maintain and improve compliance through development of guidelines and internal group rules, and training for employees.

This Tax Management Policy shall apply to all officers and employees of KE Group.

KE Group shall comply with the laws and regulations of all countries and regions in which the business activities are conducted and comply with the criteria published by international organizations such as the OECD*1 Transfer Pricing Guidelines and the BEPS*2 Action Plan to ensure proper tax reporting and payment. In addition, KE Group shall not engage in intentional acts for the purpose of tax avoidance that are not in line with the actual business objectives, nor shall KE Group develop tax strategies that deviate from normal business activity.

*1 OECD (Organization for Economic Co-operation and Development)

*2 BEPS (Base Erosion and Profit Shifting)

KE has established “Basic Policy on Governance System” to deal with various risks including taxation as well as supervision by Board of Directors. The roles of each company in KE Group with respect to taxation are as follows:

1. KE (Parent Company): Establish tax-related guidelines and internal group rules, and properly perform the tax-related duties in cooperation with KE Group Companies. In particular, with respect to tax risks associated with international transactions between Group Companies, KE shall work with Group Companies and outside international tax specialists to address the issues.

2. KE Group Companies: Properly perform the tax-related duties such as tax reporting and payment in accordance with the guidelines and internal group rules established by the Parent Company. In addition, provide reports and submit tax-related documents to the Parent Company.

KE Group shall ensure tax transparency by strengthening tax governance and implementing fair and timely disclosure of financial status.

KE Group shall be committed to establishing, maintaining and developing honest and good cooperative relationships with tax authorities in all countries and regions where KE Group conducts business activities through increased transparency. In addition, KE Group shall take appropriate corrective and remedial measures for items that have been pointed out by the tax authorities in the past to prevent recurrence.

Amendment or repeal of this policy shall be by resolution at Board of Directors meeting.