Tax authorities have determined Panasonic Corp. failed to declare about ¥22 billion in taxable income over a five-year period through March 2009 in connection with transactions with its Chinese subsidiary, sources said Monday.
The Osaka Regional Taxation Bureau has judged that the Osaka-based electronics giant concealed about ¥700 million of the total, the sources said. The bureau has reportedly imposed several hundred million yen in back taxes.
But the tax authorities appear not to have imposed a heavy additional tax, which would correspond with the amount of corporate taxes, because the transactions took place during a period when the company was in the red, the sources said.
"We have paid the entire amount" sought by the authorities, a Panasonic official said, without specifying the value.
According to the sources, Panasonic sold products to the Chinese subsidiary at unfairly low prices, leading the tax authorities to determine the price cuts were aimed at supporting the subsidiary.
The authorities likely judged Panasonic intentionally shifted profits to the subsidiary.