2021/05/06

Judgment of the Complaint for the Rescission of Tax Reassessment by the Osaka Regional Taxation Bureau

Osaka, Japan, May 6, 2021 - Shionogi & Co., Ltd. (Head Office: Osaka; President & CEO: Isao Teshirogi, Ph.D.; hereafter “Shionogi” or “the Company”) today announced that the judgment by the Tokyo High Court of the complaint for the rescission of tax reassessment by the Osaka Regional Taxation Bureau regarding Shionogi’s investment-in-kind in its UK-based subsidiary Shionogi Limited has become final and binding.

 

The company filed a complaint against the government with the Tokyo District Court for the rescission of the tax reassessment by the Osaka Regional Taxation Bureau on September 2, 2016. On March 11, 2020, The Tokyo District Court issued a judgment in which the claims of the company were upheld almost entirely.  In response to this judgment, the government filed an appeal with the Tokyo High Court on March 24, 2020. On April 14, 2021, the Tokyo High court handed down its judgment on the government’s appeal, and the government’s claim was dismissed. As neither a further appeal nor a petition for acceptance of an appeal has been filed by the government within the subsequent appeal period, the judgment has become final and binding.

1. Background

The background of this lawsuit is as follows.

September 12, 2014

Received a tax reassessment notice and a notice of assessment and determination of additional tax from the Osaka Regional Taxation Bureau

November 10, 2014

Filed a written opposition with the Osaka Regional Taxation Bureau

February 10, 2015

The Osaka Regional Taxation Bureau dismissed the Company’s opposition

March 9, 2015

Filed a further request for reconsideration of the assessment with the Regional Tax Tribunal

March 7, 2016

Received a decision dismissing the Company’s request for examination from the Regional Tax Tribunal

September 2, 2016

Filed a complaint with the Tokyo District Court for the rescission of the tax reassessment by the Osaka Regional Taxation Bureau

March 11, 2020

Judgment of the Tokyo District Court of the first instance [The company wins]

March 24, 2020

Appealed to the Tokyo High Court

April 14, 2021

Judgment of the Tokyo High Court of the second instance [The company wins]

2. Contents of the judgment

The Tokyo High Court endorsed the original decision of the Tokyo District Court, which almost completely accepted our request, and dismissed the government’s appeal.

3. Impact on Business Performance

As a result of this judgment, the Company will receive a refund of approximately 13.3 billion yen, including the additional back-taxes based on the tax reassessment notice and prior period income taxes, due to the shortage in the loss carried forward for the fiscal year ending March 31, 2014.  In addition, the Company will receive additional payments (interest) arising from refunds. These amounts will be recorded for the fiscal year ending March 31, 2022.