The Tokyo Regional Taxation Bureau has found that business newspaper publisher Nihon Keizai Shimbun Inc. failed to declare about 840 million yen in income for three years to December 2003, sources said Thursday.
The bureau has ordered Nihon Keizai Shimbun to pay about 270 million yen in additional tax and penalties for the undeclared sum.
The company declared part of the salaries paid to some employees who were transferred to its affiliates as expenses, but the tax bureau determined the payments to be donations, which are subject to taxation, the sources said.
The bureau also noted that funds provided to paper distributors as an incentive fall within the category of entertainment allowance, which is taxable, the sources said.
A Nihon Keizai Shimbun official said the company will pay the additional tax, stating it will basically respect the tax bureau's interpretation of the expenses in question, although it has different views on the scope of the donations involved.
Kubota hid income
OSAKA (Kyodo) Kubota Corp., the largest manufacturer of farm equipment and cast-iron pipes in the nation, failed to declare about 120 million yen in income for three years to March 2004, sources said Thursday.
The Osaka Regional Taxation Bureau has found that 47 million yen of the 120 million yen was intentionally hidden income and imposed 45 million yen in additional tax and penalties on Kubota. The company has already paid up, they said.
According to the sources, Kubota's practice of shouldering sales expenses for employees transferred from the parent firm to its Singapore subsidiary was an act of donation.
The practice was tantamount to transferring revenues from the profitable parent firm to the money-losing subsidiary, the subject of additional tax, the sources said.