Google Japan Fails to Declare 3.5 B. Yen in Taxable Income
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Tokyo, Jan. 15 (Jiji Press)--Japanese tax authorities have found that a Japanese unit of Google LLC failed to declare some 3.5 billion yen in income related to transactions with a Singaporean unit of the U.S. Internet giant in the year through December 2015, informed sources said Tuesday.
The National Tax Agency's Tokyo Regional Taxation Bureau concluded that Google Japan reduced its tax burden in Japan by transferring part of its profits to Singapore, where the corporate tax rate is lower than in Japan, according to the sources.
The authorities are believed to have imposed around one billion yen in back taxes, including penalty, on Google Japan. The company has already taken corrective steps.
The difficulty in appropriately imposing taxes on profits earned in many different countries by global information technology giants, including Google, Apple Inc., Facebook Inc. and Amazon.com Inc., known collectively as GAFA, has become a problem around the world.
According to the sources, advertisers in Japan paid ad money to the Google side via contracts signed with the Singaporean unit of the U.S. giant. The Japanese unit engaged in domestic business operations assisting the Singaporean unit's operations and received payments at the rate of 8 pct above related expenses.
[Copyright The Jiji Press, Ltd.]