TMCnet News
Wacoal fails to declare 1.48 bil. yen in income over 6 years+(Japan Economic Newswire Via Thomson Dialog NewsEdge)OSAKA, March 24_(Kyodo) _ Underwear maker Wacoal failed to declare about 1.48 billion yen in income over six business years through March 31, 2003, industry sources said Friday. The National Tax Agency has imposed about 520 million yen in back taxes on Wacoal, a Kyoto-based maker of lingerie, nightwear, children's underwear, outerwear and sportswear. Wacoal Holdings Corp. said it disagreed with tax authorities but accepted the decision and paid the back taxes. Wacoal exempted two subsidiaries in the United States and Hong Kong from paying royalties for the use of its trademark on their products, the sources said. The tax agency came to a decision that Wacoal should have collected royalties from the subsidiaries and that part of the subsidiaries' income abroad should have belonged to the parent company. The decision was made under what tax authorities call the transfer pricing taxation, adopted in 1986, that bans adjusting income between parent companies and their subsidiaries. In October 2005, Wacoal adopted a holding company system for its management and established Wacoal Holdings Corp. which placed underwear maker Wacoal Corp. under its wing as a wholly owned subsidiary. |