The Tokyo Regional Taxation Bureau suspects crane maker Komatsu Ltd. failed to declare about ¥17.4 billion in taxable profits over a six-year period to last March, the company said.
Under the transfer pricing taxation system, the tax office has looked into how Komatsu distributed profits to British and Belgian subsidiaries and alleged that it reported profits that did not accurately reflect its earnings in those countries, the company said.
Komatsu claimed it has “properly paid taxes on the profits from internal transactions” in Japan, Britain and Belgium and is planning to challenge the bureau’s decision.
Komatsu also intends to formally request the government open negotiations with Britain and Belgium so it can avoid double taxation and expects to receive tax refunds in the two European countries.
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