SMFL United Kingdom Tax Strategy

Sumitomo Mitsui Finance and Leasing Company, Limited (‘SMFL’) is headquartered in Tokyo, Japan and specialises in providing leasing and credit related services to clients. SMFL has recently reactivated its UK branch, with operational effect from 1 January 2021. Together, the Japanese head office and the UK branch form the ‘SMFL UK Group’ (also referred to as the ‘Group’).
SMFL UK branch’s primary trade will be to provide support services to its Japanese head office in relation to their transportation business conducted through its subsidiaries in Europe.
The SMFL UK Group publishes this Tax Strategy in compliance with Section 161 and Schedule 19 of the UK Finance Act 2016.

UK Tax Governance and Risk Management

The SMFL UK Group’s policies and controls for UK tax governance and risk management are aligned with those of the wider international SMFL Group. The Japanese Head Office has qualified tax specialists who can provide support to the UK branch as and when required.
The SMFL UK Group is committed to understanding UK tax laws and regulations, as well as tax guidelines published by international institutions. The Group is also committed to understanding the tax laws and regulations of any jurisdiction relevant to its business and operations. The SMFL UK Group also monitors ongoing tax law changes that may affect the Group, ensuring that it is aware of possible tax risks and all compliance obligations.
The Group ensures that their knowledge and understanding of UK tax requirements, such as UK tax strategy and tax compliance, is kept up to date. The Group strives to continually enhance their knowledge of tax and tax requirements.
The SMFL UK Group engages reputable external advisors to assist with UK tax compliance obligations as and when required. These obligations include filing tax returns, making tax payments and reporting appropriately, and the Group endeavours to ensure that all obligations are met in a timely and accurate manner.
The Group also engages external advisors to provide tax advice on complex tax technical matters, ensuring that they understand the associated tax implications and obligations arising in the UK and any other relevant jurisdictions.

Tax Planning and Tax Compliance

The SMFL UK Group does not engage in inappropriate tax planning or avoidance, which the Group believes is contrary to the intentions, purpose and spirit of the legislation. This is in line with the wider international SMFL Group tax policy.
The SMFL UK Group is committed to ensuring compliance with international tax rules. This includes transfer pricing rules and conforming to tax standards and guidelines published by international institutions (for example, the OECD).
The SMFL UK Group does not undertake any business activities or corporate reorganisations which are contrary to the intention, or the spirit, of the tax laws of the jurisdictions involved. The SMFL UK Group also does not undertake any activities that unduly mitigate tax burden, in the UK or other relevant jurisdictions. The Group applies these principles to guide tax planning decisions, ensuring that they maintain the highest level of compliance with local and international tax rules.
To meet its commercial objectives, the SMFL UK Group considers its corporate value by undertaking appropriate tax cost management. However, the Group fully recognises the social significance of tax payments, as confirmed by the Group’s approach to tax planning. The Group’s tax cost management is performed in line with the Group’s overall intent and purpose. Where appropriate, the SMFL UK Group consults with external tax advisors with respect to these opportunities.

Tax Risk

The SMFL UK Group does not engage in inappropriate tax planning or avoidance and will not enter into arrangements in which a material tax risk is present. The Group consults with reputable external advisors to understand any UK tax risks and consequently acts in an appropriate manner to address any such possible risks.
The SMFL UK Group endeavours not to provide or promote products which could cause controversy or suspicion for tax purposes when providing customers with its services. Alongside this, the SMFL UK Group strives not to engage in, or support, any transactions or activities whereby its customers could unduly avoid tax burden or their obligations for filing tax returns. This approach is aligned with the wider international SMFL Group tax policy.
The SMFL UK Group monitors the tax risks facing the Group, both from a financial and reputational standpoint.
The scope of the operations and business activities of SMFL UK branch is limited to providing support services to its Japanese head office in relation to their transportation business in Europe. The UK branch is fully subject to UK corporation tax and operates under an established tax compliance framework. As a result, the Group does not believe that a material UK tax risk exists. This risk will continue to be monitored, with a particular focus on the scope of the UK branch’s business operations and activities.

Relationship with HMRC

The SMFL UK Group is committed to fulfilling its obligations for filing UK tax returns, making tax payments and reporting to HMRC, whilst ensuring compliance with UK tax laws, regulations and double tax treaties.
SMFL UK Group plans to engage with HMRC proactively on any relevant areas, including seeking formal advance clearances on significant and material tax issues. The Group will develop a cooperative and transparent relationship with HMRC. When deemed appropriate, SMFL UK Group will employ the services of external tax advisors to act as our agents, and in some cases, they may liaise with HMRC on our behalf.