Facebook Found to Have Underreported Income in Japan

Society Economy

Tokyo, Aug. 29 (Jiji Press)--Japanese tax authorities have found Facebook Inc.'s Japan unit failed to declare 500 million yen, or 4.7 million dollars, in taxable income over the two years through December 2017, informed sources said Thursday.

Facebook Japan has agreed to correct its income declarations, according to the sources. Back taxes and penalties are believed to have totaled around 150 million yen.

Japanese advertisers and ad agencies paid ad fees to a Facebook unit in Ireland under contracts with the Irish company, while Facebook Japan received compensation for assisting the Irish unit's operations, the sources said.

Ireland's effective corporate tax rate stands at 12.5 pct, much lower than around 30 pct in Japan.

The Tokyo Regional Taxation Bureau has told Facebook Japan that its compensation should have been linked to the ad fee revenues.

[Copyright The Jiji Press, Ltd.]

Jiji Press