Additional Tax Assessment Against Mexican Subsidiary and Tax Litigation
First written in FY2025-H1. 1 of 3 entries say "Materialised", first in FY2025. Latest entry: FY2026-H1.
0 other companies' latest entry also says "Mitigated".
- FY2026-H1MitigatedAnnual report
「The judgment largely upheld our claims, in contrast to the previous ruling, while rejecting some of them. As we have not yet received notification of the Mexican tax authorities' future response to the judgment, it has not become final.」
In the Mexican tax litigation, the judgment in the proceedings following remand to the first instance largely upheld the company's claims. However, the response of the Mexican tax authorities remains uncertain, and it has not been stated that the risk and payment demand have been resolved. - FY2025MaterialisedAnnual report
「Although a first-instance judgment rejecting G-MEX's claims was handed down in February 2025, the judgment contains multiple grounds for illegality and unconstitutionality, including inadequate examination of the case. G-MEX therefore filed a direct amparo lawsuit against the judgment in March of the same year.」
The risk surrounding the additional tax assessment progressed from a demand for payment of MXN 264 million, equivalent to ¥1,935 million, to a loss in the first instance and the filing of a direct amparo lawsuit. No provision has been recognized. - FY2025-H1First statedAnnual report
「G-TEKT MEXICO CORP.S.A. DE C.V., the company's Mexican subsidiary (G-MEX), received an amended assessment notice from the Mexican tax authorities in October 2023 ordering it to pay additional taxes in connection with its tax return for the fiscal year ended December 2021. As we believe the notice to be unreasonable and contrary to Mexican tax law, G-MEX filed an administrative appeal with the authorities in December of the same year to contest the assessment. In July 2024, G-MEX received a resolution notifying it of the authorities' decision on the appeal. The authorities' decision largely rejected our claims and continued to demand payment of MXN 264 million, equivalent to ¥1,911 million at the exchange rate as of the end of the interim consolidated accounting period. G-MEX was unable to accept the decision and filed a lawsuit in September 2024 to contest it and reaffirm the validity of its administrative appeal. As it is difficult at this time to predict the final outcome of these lawsuits, and because it is not currently possible to make a reasonable estimate of their impact on the financial position and operating results for the current consolidated fiscal year, no provision or other reserve has been recognized.」
Following the administrative appeal against the additional tax assessment involving the Mexican subsidiary, the company continued to be required to pay MXN 264 million, equivalent to ¥1,911 million, and filed a lawsuit in September 2024. As the final outcome and financial impact cannot be reasonably estimated, no provision has been recognized.