MUFG Bank, Ltd. is a Japanese incorporated bank and a wholly owned subsidiary of Mitsubishi UFJ Financial Group, Inc ('MUFG'), the Japanese incorporated ultimate parent of the group. This Tax Strategy covers the Bank's operations in the UK.

MUFG's corporate vision is to be the world's most trusted financial group, and is committed to act responsibly in the best interest of its customers and society as a whole. The Bank's tax strategy and tax risk appetite reflect the group's vision and values. The Bank's tax strategy is to manage its tax position in a manner aligned with its business strategy while seeking to minimise tax risk wherever practicable.

The Bank has adopted the UK Code of Practice on Taxation for Banks (the 'Code'), which requires a documented tax strategy and governance process for taxation matters encompassed within a formal policy.

Tax governance and management of tax risk

Ultimate responsibility for the Bank's tax strategy and tax governance framework in relation to its UK operations rests with the Management Committee ('MC') which comprises the CEO and heads of each business unit and support function. Responsibility for monitoring adherence to the tax strategy and governance framework rests with the Chief Financial Officer ('CFO') an MC member. Day to day responsibility for operating in accordance with the tax strategy and framework rests with the Head of Tax, who reports regularly to the CFO. Tax matters are presented to MC where appropriate.

The Bank's tax compliance position is managed by the tax department, staffed by experienced UK tax professionals. Tax aspects of all new business proposals, complex or significant transactions and new products are considered by the tax department as part of the Bank's wider new business review framework. Skilled external advice is taken if genuine doubt exists about the tax position, particularly in relation to non UK taxes. The Bank's tax department will consult with tax management in Japan on matters impacting its s wider tax position.

Operational tax risks are monitored and controlled by the Bank's Operational Risk Group. Tax risk controls are subject to periodic review by Internal Audit, which reports directly to MC.

Appetite for UK tax risk

The Bank's appetite for UK tax risk reflects the MUFG vision and values. Although the Bank operates in a complex international sector which by its nature carries a degree of tax risk, the Bank seeks to minimise or avoid tax risk wherever practicable. Documented preventative controls are in place designed to identify tax risk at source and allow its effective mitigation.

Attitude towards UK tax planning

Tax is a business cost. The Bank is prepared to consider planning to mitigate this cost, but, in line with its appetite for tax risk, only where this is expressly permitted or envisaged by tax law in the context of genuine commercial activity or to support regulatory policy objectives. The Bank is committed to paying the tax intended by Parliament on its commercial activities. In doing so the Bank seeks to obtain tax relief for its business costs and to prevent its income being taxed more than once. Particular reliance is placed on double tax treaties to alleviate double taxation when dealing with overseas entities. The Bank aims to price all transactions with overseas affiliates on the basis of the arm's length standard, interpreted using OECD guidelines.

The Bank is not prepared to be party to, or to knowingly facilitate for others, transactions designed to achieve results which do not accord with the aim or intention of tax laws, whether in the UK or overseas. The Bank does not provide tax advice, nor design nor promote tax based products to others. Staff are not measured, nor incentivised to act, by reference to tax savings for the Bank or for others.

Approach to dealing with HMRC

In accordance with its Code obligations the Bank maintains an open and transparent relationship with HMRC. The Bank accepts that being treated as low risk by HMRC carries with it a responsibility to be proactive in identifying and bringing potential issues to HMRC's attention. This means that issues of significant tax uncertainty - uncertainty not only about how existing tax law applies to existing transactions, but also uncertainty about how new law is meant to apply in future - are disclosed to HMRC as and when identified, and discussed collaboratively with HMRC to seek their resolution at the earliest opportunity.

UK subsidiaries

The Bank has two UK subsidiaries, MUFG Funding (UK) Limited and MUFG Nominees (UK) Limited; these companies have modest UK activity (or are dormant in the case of MUFG Nominees (UK) Limited). This Tax Strategy covers the UK activities of these entities.

Responsibility for the tax affairs of these companies ultimately rests with each company's Board but day to day management of its UK tax affairs is managed by the Bank's tax department, who seek to maintain an open and transparent relationship with HMRC regarding UK tax matters. Both entities seek to minimise or avoid UK tax risk, and will only enter into UK tax planning in the context of commercial activity.

The Bank regards the publication of this strategy as complying with its duty under FA 2016 Schedule 19 paragraph 22(2) to publish a UK tax strategy in the year to 31 March 2019.