Chubu Electric Power Co. failed to declare about 7.6 billion yen in taxable income in the two-year period to March 2005, while Brother Industries Ltd. failed to declare about 2.2 billion yen in the two-year period to March 2004, tax agency sources said Tuesday.
Organo Corp., a maker of water treatment equipment, concealed about 300 million yen in income in seven years through March 2005, and failed to declare over 400 million yen in taxable income, the sources said, adding that the firm used some of the funds to bribe Gifu officials to win public works contracts.
All three companies are listed on the first section of the Tokyo Stock Exchange.
Tax authorities slapped Chubu Electric with about 2.5 billion yen in back taxes, and the utility revised its income report and paid the back taxes last March, they said.
Chubu Electric appropriated more than 7 billion yen as costs for maintenance work at the Hamaoka nuclear plant in Shizuoka Prefecture in the two-year period, but the National Tax Agency said the costs should not be booked in that period, the sources said.
“We had conflicting views (with tax authorities), but we have paid the taxes,” the utility’s public relations office said.
In Brother’s case, tax authorities hit the major information and telecommunications equipment maker with about 800 million yen in back taxes for failing to declare income from its subsidiary in Hong Kong, the sources said.
Brother paid the back taxes in February, but it filed a complaint with the agency against its treatment in March, they said.
“We have filed tax reports appropriately, and the treatment (by tax authorities) is regrettable,” Brother’s public relations office said.
Brother had reported the income of its Hong Kong unit to local tax authorities and paid income tax in Hong Kong, where rates are lower than in Japan.
But Japan’s tax agency judged that Brother is not eligible for special treatment that would allow it to file tax returns in the country or area where its subsidiaries are located, the sources said.
The authorities say Brother should have reported the income of its Hong Kong unit to Japanese authorities because components that the subsidiary procured were used for production at factories outside Hong Kong, they said.
In the case of Organo, tax authorities hit the company with about 240 million yen in back and punitive taxes, according to the sources.
Organo paid about 300 million yen to its subcontractors as commission and subcontracting fees, but only part of the money was given to the subcontractors and the rest was paid back to Organo, the sources said.
Organo then used part of the money to bribe Gifu prefectural officials to win contracts for a water purification project, they said. The bribe was uncovered in 2004.
The agency judged that the 300 million yen should have been treated as social expenses that are taxable.
Organo said it has paid the back and punitive taxes, although it has conflicting views with tax authorities over the case.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.