Sony Corp. has been hit with a surprise tax bill of ¥27.9 billion ($245 million) from the Tokyo Regional Taxation Bureau. Company says it will appeal.
Some of the extra taxes are charges against profits that Sony subsidiary Sony Computer Entertainment gained from transactions with its U.S. subsid between April 1999 and March 2005.
Tax authorities also want a bite of the profits Sony earned from the CD and DVD manufacturing ops of its foreign subsidiaries in the two fiscal years ending in March 2004 and March ’05.
The tax office estimated that Sony and SCEI had combined earnings of $653 million more than they reported, giving rise to the extra taxes.
Both companies said they will protest the decision, claiming they are being hit with double taxation, in violation of bilateral treaties.
“We believe that we will be able to avoid this double taxation, leaving no significant impact on our group earnings,” the companies said in a joint statement.