Application of the Consolidated Taxation System and Response to the Transition to the Group Tax Sharing System

「The company and its consolidated subsidiaries transitioned from the consolidated taxation system to the group sharing system from the first quarter of the current fiscal year. Accordingly, accounting and disclosure for corporate and local corporate taxes and tax-effect accounting are conducted in accordance with the Practical Solution on Accounting and Disclosure under the Group Sharing System (Practical Solution Report No. 42, 12 August 2021).」

「The Company and its domestic consolidated subsidiaries will transition from the consolidated taxation system to the group-sharing system from the following consolidated fiscal year.」

「The company and its domestic consolidated subsidiaries apply the treatment under Paragraph 3 of “Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (Practical Response Report No. 39, 31 March 2020) to deferred tax assets and deferred tax liabilities for items established under the group tax sharing system created by the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), and for items subject to revisions to the single-entity taxation system accompanying the transition to the group tax sharing system. Accordingly, the amounts of deferred tax assets and deferred tax liabilities are based on the provisions of the tax laws before amendment.」

「For the transition to the group relief system established under the Act Partially Amending the Income Tax Act and other legislation (Act No. 8 of 2020), and for items revised in connection with that transition, the Company and certain domestic consolidated subsidiaries have applied the treatment in Paragraph 3 of Practical Solution No. 39, Accounting for Tax Effect Accounting on the Transition from the Consolidated Taxation System to the Group Relief System. Accordingly, Paragraph 44 of the Implementation Guidance on Tax Effect Accounting has not been applied, and deferred tax assets and liabilities are calculated under the provisions of the tax laws before the amendments.」

「For the transition to the group relief system established under the Act Partially Amending the Income Tax Act and other legislation (Act No. 8 of 2020), and for items revised in connection with that transition, the Company and certain domestic consolidated subsidiaries have applied the treatment in Paragraph 3 of Practical Solution No. 39, Accounting for Tax Effect Accounting on the Transition from the Consolidated Taxation System to the Group Relief System. Accordingly, Paragraph 44 of the Implementation Guidance on Tax Effect Accounting has not been applied, and deferred tax assets and liabilities are calculated under the provisions of the tax laws before the amendments.」

「During the current consolidated fiscal year, the Company and its consolidated subsidiaries applied for approval under the consolidated taxation system. As the consolidated taxation system will apply from the following consolidated fiscal year, accounting procedures have been conducted from the current consolidated fiscal year on the assumption that the system will apply.」