The Asahi Shimbun is reporting that Toyota just got hit with a 2 billion yen bill for failure to report about 6 billion yen in taxable income from as far back as March 2004. Although the Nagoya Regional Taxation Bureau discovered Toyota's omissions, they didn't make an official announcement. But Asahi's sources reported that the back taxes were levied because Toyota sold parts below their market value to two overseas subsidiaries. It was mainly Camry parts going to Australia that allowed indirect payments to Middle Eastern sales agents.

That meant they could cut their taxable income by about 2 billion yen. This money was apparently used to help finance sales promotions at the subsidiaries and to further help improve their financial results. The tax authority determined that these discounted exports were basically just subsidiary subsidies (try saying that tens times fast). They found that Toyota also padded expenditures by half a billion yen on advertising and had improperly accounted for a certain amount of tax-deductible costs. It's a pretty complex web of accounting gymnastics beyond that, but rest assured, the tax authority will figure it out. We're guessing this won't be the last we'll hear of this issue.

[Source: Asahi Shimbun]

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