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June 29, 2005
Tokyo, June 29, 2005 - Sony Corporation today announced that it has received notification from the Tokyo Regional Taxation Bureau (“TRTB”) of a reassessment of the profits it reported from its transactions with a number of its worldwide subsidiaries (CD and DVD disc manufacturing operations) for the five fiscal year period of 1998-2002. The TRTB has concluded that the allocation of profits between Sony and these subsidiaries was too low on the Japan side. Income was reassessed at an additional 21.4 billion yen resulting in Sony incurring an additional cash tax (including corporation tax and others) of approximately 4.5 billion yen.
Sony disagrees with the position of the TRTB and will promptly lodge an objection. Sony believes that its allocation of income was appropriate and that it has paid the proper amount of taxes to each of the jurisdictions. Nevertheless, simultaneously we plan to formally request (where available) for bilateral consultations between the various countries and Japan to obtain relief from double taxation under the applicable tax treaties. Sony believes that it will ultimately be able to resolve this issue to its satisfaction.
As a result of this reassessment, we do not expect any material impact on our consolidated accounts.