KARIYA (Japan) ―DENSO Corporation today announced that on June 30, it received notification of a reassessment of income from the Nagoya Regional Taxation Bureau (NRTB) as a result of an audit on transfer pricing taxation for the six years from fiscal year ended March 31, 2002 through 2007.
The NRTB judged that the prices in the transactions between the company and its overseas subsidiaries are different from the arm’s length prices. The notice indicates that the company’s reassessed income is 15.5 billion yen, and the resultant total additional tax liabilities, including local taxes and the additions to taxes, is computed at approximately 7.3 billion yen.
DENSO believes that it has been using the arm’s length prices for transactions between the company and its overseas subsidiaries on the basis of third party transaction price, and DENSO and its subsidiaries have been appropriately filing tax returns and paying taxes in related countries.
DENSO disagrees with the judgment of NRTB and will promptly lodge an objection. Simultaneously, DENSO will request bilateral consultations to obtain relief from double taxation pursuant to a provision in the applicable tax treaties between Japan and related countries.
DENSO believes that it will be able to obtain a satisfactory resolution of this issue by having the company’s position understood through fair proceedings including the bilateral consultations mentioned above.
DENSO does not expect any significant impact on its consolidated financial results for the year ending March 31, 2009 as a result of this reassessment.
DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global supplier of advanced technology, systems and components. Its customers include all the world's major carmakers. Worldwide, the company employs approximately 119,000 people in 32 countries and regions, including Japan. Consolidated global sales for fiscal year ended March 31, 2008 totaled US$40.2 billion. DENSO common stock is traded on the Tokyo, Osaka and Nagoya stock exchanges.
Source: Infibeam.com
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