Judgment on a Petition for Rescission of a Corporate Tax Correction

December 24, 2004

Mizuho Financial Group, Inc. ("MHFG") hereby announces that the Supreme Court rendered today its judgment on the petition of Mizuho Corporate Bank, Ltd. ("MHCB"), a wholly-owned subsidiary of MHFG, for rescission of a corporate tax correction regarding MHCB's write-off of credits against Japan Housing Loan, Inc.

1. Background of the Facts

March 1996 The Industrial Bank of Japan, Limited ("IBJ", later succeeded by MHCB) deducted loss in its tax return for the Fiscal 1995 from its write-off of credits against Japan Housing Loan, Inc. in an amount of JPY 376 billion.
August 23, 1996 IBJ received a notice of corporate tax correction from the Director of the Kojimachi Tax Office.
August 27, 1996 According to the correction notice, IBJ provisionally made an additional tax payment of JPY 222.6 billion.
August 30, 1996 IBJ disagreed with the correction and filed a petition requesting the National Tax Tribunal to reexamine the correction.
October 27, 1997 The National Tax Tribunal dismissed IBJ's petition for reexamination.
October 30, 1997 IBJ filed a lawsuit in the Tokyo District Court.
March 2, 2001 The Tokyo District Court ruled in favor of IBJ.
March 16, 2001 The Director of the Kojimachi Tax Office appealed to the Tokyo High Court.
March 14, 2002 The Tokyo High Court ruled against IBJ.
March 27, 2002 IBJ appealed to the Supreme Court and filed a motion for acceptance of appeal.
April 26, 2002 MHCB took over the case as the successor to IBJ.
October 28, 2004 The Supreme Court decided to hear arguments on the case.
December 6, 2004 The relevant parties made oral arguments at the Supreme Court.
December 24, 2004 The Supreme Court rendered its judgment.

2. Details of the Facts

The Supreme Court ruled in favor of MHCB, supporting MHCB's petition for rescission. As a result, the additional tax payment of JPY 222.6 billion provisionally made in 1996 will be refunded to MHCB.

3. Effect on the Profit and Loss Statements

The effect on the profit and loss statement of MHFG on a consolidated basis is expected to be around JPY 280 billion. This effect is composed of the reversal of Reserve for Contingencies, the receipt of interest attached to the refund of provisional tax payment, and the decrease in Valuation Allowance for Deferred Tax Assets.
The revision of MHFG's previously announced Earnings Estimates for the Fiscal 2004 will be announced on December 27, 2004 after reviewing the financial effect of this judgment.

Mizuho news from around the globe
Mizuho Global News
Back to top