• Kyodo News

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Hewlett-Packard Japan Ltd. is alleged to have failed to declare about ¥47 billion in taxable income in Japan over two years through October 2006 but the Tokyo-based unit of the U.S. computer builder has apparently challenged the claim, sources said Wednesday.

After an audit of the Japanese subsidiary of the U.S. company, the Tokyo Regional Taxation Bureau concluded that roughly ¥47 billion the Japanese unit logged as expenses paid to its U.S. parent were not deductible, saying it was not evident for what services they were paid, the sources said.

The Japanese company moved personnel and other administrative operations to the U.S. firm and the amount was paid as expenses, according to the sources.

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