Daikin penalized for dodging taxes

Kyodo

Osaka tax authorities have ordered Daikin Industries Ltd. to pay some 160 million yen in penalties and back taxes for failing to declare 550 million yen in taxable income over the three years to March 31, 2003, sources close to the case said Tuesday.

The authorities decided that some 400 million yen the air conditioner maker had entered as compensation for losses at three of its domestic sales subsidiaries was taxable income, the sources said.

The remaining 150 million yen is related to sales promotion fees sent to its Thai sales subsidiary, and was also deemed taxable, the sources said.

A Daikin spokesman said the company paid the tax and penalties in compliance with instructions from the authorities after their regular tax inspections.