OSAKA -- Electrical contractor Kinden Corp. failed to declare about 900 million yen in corporate income in the three business years to March 31, 2000, and has been ordered to pay 300 million yen in back taxes and penalties, industry sources said Wednesday.
The Osaka Regional Taxation Bureau concluded that about 240 million yen of the total amount was intentionally concealed by the Osaka-based company and ordered it to pay 300 million yen, the sources said.
According to the sources, Kinden failed to declare some 660 million yen in income that was a part of its earnings from electrical installation work completed during the three-year period.
In addition, Kinden failed to declare some 180 million yen in income, including commissions from joint ventures in Vietnam and the Philippines, according to the sources.
The tax bureau also concluded that 60 million yen paid by the company to other companies as referral fees when Kinden undertook installation work for them should have been treated as taxable entertainment and social expenses instead of tax-exempt expenses.
A Kinden official said, "There was a disagreement between the tax bureau and our company over how long it took to complete the work (which determines how long firms have to declare income), but we dealt with the matter in accordance with the bureau's instructions," indicating the company paid the 300 million yen.
The official denied the company intentionally concealed the income.