The Study Group on the "Guidelines for Multi-Credit Out-of-Court Workouts" (JBA fulfils secretariat functions) partially amended the "Q&A" for helping parties apply the Guidelines, and released the amended version on March 31.The new measures were introduced through the fiscal 2005 tax reform. One measure states that when debtors are relieved from debts in accordance with a reorganization plan based on a multi-credit out-of-court workout that meets certain requirements, valuation losses and profits on specified assets of debtors are booked and other losses are deducted preferentially to those in a blue form for an income tax return. An amendment was made to the Q&A to accommodate this measure.The newly added Q&A provides the necessary procedure for applying the new tax rule. Specifically, it requires that (i) three or more advisors of attorneys and public certified accountants, who are chosen by the creditors, be involved, and (ii) those advisors ascertain the reorganization plan to have been formulated in accordance with the procedure specified in the Guidelines.
News
Mar.31.2005
Japanese Bankers Association