Tokyo tax man fines Japanese arm of Universal Music

Authorities allege it dodged levies on $101 million

TOKYO — Universal Music LLC, the Japanese arm of Universal Music Group, has been fined $38 million by the Tokyo tax authorities for not declaring nearly $101 million in taxable income.

Universal, owned by French media conglom Vivendi, is appealing.

In January 2009 Universal Music LLC bought out another Japanese entity, Universal Music KK, using $1.01 billion in borrowings from a French company within the group. It later claimed $101 million of interest on the loan as a loss for a three-year period ending in December 2010.

The cross-border movements of coin enabled the company to use the lower tax rate in France.

Tokyo tax authorities charge that the restructuring was carried out solely to trim the company’s tax bill. Universal has countered in a statement that it followed “appropriate procedure under tax law.”

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