Japan Storage Battery Co. was ordered to pay 130 million yen in taxes and penalties for failing to declare 400 million yen in income, sources said Monday.
The Kyoto-based company sent engineers to a subsidiary in the city of Tianjin on the northeast coast of China to expand a subsidiary's automobile battery factory and posted the cost as tax-free expenses in the three years through March 2002, the sources said.
The Osaka Regional Taxation Bureau decided the factory expansion was a task of the subsidiary, which should have borne the cost of sending engineers, they said.
The bureau ruled that Japan Storage Battery's outlay for the engineers was a donation to the subsidiary, the sources said, and of the undeclared income, authorities decided the company deliberately hid around 100 million yen and imposed a penalty.
The firm has paid the full fine and back taxes, a company official said.