OSAKA – Major trading house Marubeni Corp. hid about 1.6 billion yen in income over the five years to fiscal 2001 and failed to declare another 3.4 billion yen, partly due to incorrectly writing off expenses, company officials and sources said Saturday.
The Osaka Regional Taxation Bureau is believed to have levied about 1 billion yen in back taxes, including a heavy penalty, the sources said, adding that Marubeni has already paid up.
A Marubeni spokesperson said the company did not agree with tax authorities’ assessments, but “complied in the end.”
The Osaka bureau of the National Tax Agency detected the problem, which mainly involved transactions of overseas affiliates, after recent inspections of the company, the sources said.
In fiscal 2001, which ended in March last year, Marubeni consolidated subsidiaries in Australia by transferring operations and about 1.3 billion yen in surplus funds of a profit-generating subsidiary to a loss-making unit, the sources said.
But Marubeni failed to first declare the surplus funds as income of the parent firm, as required when a subsidiary is liquidated, leading the tax bureau to conclude the company intentionally hid the income, the sources said.
The tax bureau also determined that about 300 million yen in operational commission fees paid by Marubeni to overseas subsidiaries are donations that cannot be written off as expenses, the sources said.
The case comes after the tax bureau found last September that Marubeni had hidden about 1.8 billion yen in income earned from exporting printing equipment to Nigeria.