OSAKA (Kyodo) Struggling supermarket chain Daiei Inc. has revised its tax returns to reclassify about ¥25 billion in earlier-booked losses as taxable income for four years to February 2009, as instructed by the tax authorities, sources said Thursday.
But the taxable income has been used for offsetting carried-over losses, resulting in no additional tax payments, they said.
Under its rehabilitation plan, Daiei waived about ¥27 billion in loans to its nine real estate business units in a bid to consolidate them and booked the sum as losses in January 2006. But it later changed its policy and absorbed 11 subsidiaries, including the nine.
The Osaka Regional Taxation Bureau told Daiei the loan waivers should be considered contributions to the nine units and could not be booked as losses because the consolidation did not take place, the sources said.
A Daiei representative said the company had differed with the authorities over the losses but has eventually accepted the authorities' interpretation.