Tax authorities have filed a criminal complaint against a former executive of Microsoft Co., a wholly owned Japanese subsidiary of Microsoft Corp. of the United States, on suspicion of evading income taxes by exercising stock options from the U.S. firm, informed sources said Monday.
The Nagoya Regional Taxation Bureau filed the complaint against Shoji Hasegawa, 52, for evading some 275 million yen in income taxes by failing to declare 720 million yen in taxable income arising from stock option-related profits in 1998 and 1999.
Although there have been many cases in which Japanese tax authorities have slapped punitive fines and back taxes on those who failed to declare income from exercising stock options, the move is the first filing of a criminal complaint in connection with such an incident.
Stock options are the right to buy or sell a stock at a specified price within a stated period. They have become a popular form of employee incentive and compensation.