Takeda Chemical coughs up 500 million yen for back taxes

OSAKA — Takeda Chemical Industries Ltd. paid E00 milElion in penalties and back taxes after it was found the drugmaker underreported around E.3 billion in income and expenses, sources familEiar with the case said MonEday.

Takeda Chemical, based in Osaka, paid E00 million in commissions, which it wrote off as losses, in 1996 to a comEpany it has set up in China that provides information about the Chinese pharmaEceutical market, the sources said.

Taxation authorities deemed that the firm simply shifted the funds to the ChiEnese firm in a bid to conceal income as no services were provided in return, the sources said.

Between January 2000 and September 2001, Takeda Chemical also booked in inEstallments of around E00 million in costs to repair facilEities at a factory in YamaguEchi Prefecture. But the auEthorities judged that they should have been booked all together when all the work was completed, the sources said.

The authorities concluded that the company deliberately made the payments to hide income, according to the sources.

Furthermore, the authoriEties deemed that around E billion the firm paid in comEmissions to institutions in the name of new drug research should have been paid when the research showed some reEsults, the sources said.

But this amount was not subject to penalties and back taxes because there were no indications the firm deliberEately arranged such commisEsion payments, the sources said.

An official at Takeda ChemEical said there were “differEences in views” with the taxaEtion authorities over the timEing of when the research expenses were booked, but the firm decided to heed the authorities’ interpretation.