EPSON FAILS TO DECLARE TAXABLE INCOME

[Anonymous]

Seiko Epson Fails to Declare 2.8 Bil. Yen in Taxable Income
Jun. 06-TOKYO — Seiko Epson Corp. failed to declare some 2.8 billion yen in taxable income over six years to March 2005, it said Friday.A Tokyo Regional Tax Bureau investigation also found some 100 million yen in unauthorized transactions on the part of its former employee, it said.The amount of back taxes the leading printer maker was ordered to pay came to about 900 million yen.The company said in a news release posted on its website that it has accepted the charge, though its views on the matter differ with those of the tax authorities.The Tokyo tax authorities found that products the company sold through a Dutch subsidiary to other subsidiaries in Europe were priced lower than usual levels, generating smaller profits for the parent company, the company said. Those prices were varied in line with the price levels on local markets, but the authorities determined that the unrealized additional profits the company should have earned from the Dutch subsidiary are taxable, it said.During the probe, the authorities also found that the former employee misused 100 million yen between fiscal 1999 and fiscal 2001, and judged that the company was hiding those transactions, it said.The former employee was embezzling part of the total sum and returned about 30 million yen to the company, it said, adding the company will not file a criminal complaint against the ex-employee.Seiko Epson is a world leader in ink-jet printers. It earned 1,549.5 billion yen on consolidated sales in the business year through March, with 120 group companies in Japan and abroad.

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June 7, 2006 at 12:06 PM