Mitsubishi, Mitsui cut back taxes on Australia LNG

04 December 2008 14:32  [Source: ICIS news]

TOKYO (ICIS news)--Tokyo Regional Taxation Bureau (TRTB) has reduced back taxes on major Japanese trading houses Mitsubishi Corp and Mitsui & Co, the companies said on Thursday.

The reductions stem from by a mutual governmental agreement reached between Japan and Australia regarding a transfer pricing taxation in connection with the firms’ liquefied natural gas (LNG) project in Western Australia

Both companies had received a letter of notice from Japan's National Tax Agency (NTA) on Wednesday, they said.

Mitsubishi and Mitsui had previously received amended assessments from the TRTB based on transfer pricing taxation regulations concerning the firms’ transactions with their subsidiaries in Australia, and Mitsui had paid yen (Y) 11.1bn ($119.2m) in back taxes, the firms said.

Mitsubishi did not state how much they had paid, however.

These transactions were carried out by both companies during the three fiscal years from the fiscal year ended 31 March 2000 to the fiscal year ended 31 March 2002, the companies added.

Mitsubishi and Mitsui had filed objections to the bureau on these amended assessments and requested for a mutual agreement procedure based on the tax treaty between Japan and Australia.

Mitsubishi and Mitsui would now receive reduced amended assessments from the TRTB, while their affiliates expected to receive a correlative relief from the Australian tax authorities, the companies said, without disclosing the amount.

These transactions would have no impact on either company’s consolidated earnings forecasts for the full year ending 31 March 2009.

($1= Y93.15)

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By: Tomomi Yokomura
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