Business

100 at Credit Suisse fail to declare ¥2 billion

Kyodo News

Some 100 employees of Credit Suisse Securities (Japan) Ltd. failed to declare ¥2 billion in income from stock option-related profits, sources said Friday.

The National Tax Agency has imposed about ¥800 million in back taxes, including penalties, on the employees, most of whom have already revised their declared income, the sources said.

Meanwhile, the agency has filed an accusation with Tokyo prosecutors against a former senior official of the affiliate of major Swiss financial institution Credit Suisse Group AG on suspicion of evading taxes, the sources said.

The former official, identified as Takashi Hatta, 46, who currently lives in Canada, is suspected of receiving parent company shares as a bonus, failing to declare about ¥350 million in income gained through the sale of the shares, and evading some ¥130 million in income tax.

After retiring from Credit Suisse Securities in 2007, Hatta allegedly sold the shares on overseas markets. Hatta appeared to have already corrected the declared income.

The sources said the employees of Credit Suisse Securities had received and exercised stock options to purchase shares of the parent company at prices lower than market prices. But they did not declare the profits gained through the sale or management of the shares they purchased.

Most of the employees appeared to have traded shares through accounts abroad that are difficult for Japan’s tax authorities to notice, the sources said.

Under the income tax law, taxpayers are required to declare profits from stock options as wages and profits through the sale of shares as income from transfer assets.

Stock options are awarded as a form of incentive by a company to their employees or executives, who can purchase the company’s shares at predetermined prices. They can post huge profits upon the sale of those shares when they go up.