Electronics maker Seiko Epson Corp. failed to declare 4.2 billion yen in income over five business years through March 1999, including 400 million yen in concealed revenues, sources said Wednesday.
Seiko Epson, based in Suwa, Nagano Prefecture, has paid 1.6 billion yen in penalties and back taxes, the sources said.
Tax auditors from the Tokyo Regional Taxation Bureau reportedly determined that Seiko Epson deliberately concealed 400 million yen in income through account dressing in transactions with its overseas subsidiaries and failed to report 3.8 billion yen as a result of a variety of bookkeeping errors.
Seiko Epson, an affiliate of Seiko Corp., has more than 50 sales and manufacturing subsidiaries in Asia, Europe and North and South America.
The company shouldered part of its Asian subsidiaries' public-relations costs and covered exchange-rate losses from the 1997 Asian financial crisis, booking the sum as expenditures, the sources said.
Tax authorities, however, judged that the sum constituted taxable donations, they said. Seiko Epson officials said the company paid all the penalties and back taxes despite having a difference of opinion with tax authorities.
The company, established in 1985, mainly handles computer peripherals. It posted sales of 903.5 billion yen and pretax profits of 52.7 billion yen in the year to March 31 and aims to be listed on the first section of the Tokyo Stock Exchange next year.