NAGOYA (Kyodo) Gas appliance manufacturer Rinnai Corp. failed to declare some 400 million yen in taxable income over the six business years to March 31, 2005, industry sources said Tuesday.

The local tax bureau has collected back taxes of 130 million yen, including penalties, from the Nagoya-based company, which was found to have transferred taxable income to its foreign-based subsidiaries by charging low fees for their use of its brand name, the sources said.

Rinnai gets fees from several overseas subsidiaries in Asia for their production and sale of Rinnai-brand gas appliances, including boilers, they said.

But the level of those fees was lower than what other Japanese manufacturers charge their overseas subsidiaries for similar production and sale of their brand products, the sources said.

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