Panasonic hid ¥11 billion in income: tax bureau

Kyodo

The Osaka Regional Taxation Bureau has told Panasonic Corp. that the company failed to declare ¥11 billion in taxable income in two financial years through March 2011, sources said.

Panasonic, based in Kadoma, Osaka Prefecture, was not ordered to pay a penalty tax as it booked a loss in the year ending in March 2010, the sources said.

The tax bureau believes the company intentionally declared lower revenues for parts sold to its overseas units below those actually earned, the sources added.

The company is also believed to have saturated operating costs by making expenses related to its overseas units’ sales promotion costs as well as research and development costs, they said.

The tax bureau says those expenses should have been logged on the units’ books, not on the books of the Osaka head office, adding that the expenses are seen as “donations” that cannot be booked in its earnings reports.

A Panasonic official said the tax bureau and the company did not agree on the amount of taxable income, but Panasonic decided to follow instructions given by authorities, the sources said.