Softbank failed to report Bermuda earnings
Technology giant Softbank Group has corrected four years of tax filings after Japanese authorities uncovered hundreds of millions of dollars of undeclared earnings in two Bermuda subsidiaries.
The Bermuda entities were set up by two Softbank subsidiaries — US telecoms units Sprint and Brightstar. Softbank acquired Sprint in 2013 and Brightstar a year later.
The Tokyo Regional Taxation Bureau said SoftBank had failed to report earnings at the two subsidiaries, and another one in Singapore, for four years through March 2016, the Asahi Shimbun newspaper reported.
The unreported earnings amounted to 93.9 billion yen (about $875 million) at the three offshore subsidiaries. Taken against deferred losses, the omissions resulted in 3.7 billion yen in additional taxes for SoftBank, the company said.
Softbank told Asahi that Sprint and Brightstar had set up their own subsidiaries in Bermuda, before it took them over.
The US companies had arrangements to divert part of the money they paid for business purposes to their subsidiaries in Bermuda so as to maximise profits, according to the newspaper.
Japanese tax authorities said the Bermuda companies were not involved in any substantial business activities. On that basis, their profits were liable for taxation through the parent company under Japan’s anti-tax avoidance measures.
The subsidiary in Singapore was found to have had few business transactions with companies beyond its affiliates.
A Softbank spokesperson told Asahi: “We should have considered [tax declarations] after gaining a full grasp of income earned by all our overseas subsidiaries following our acquisitions of the companies.
“But we could not in a timely fashion because there were hundreds of companies under the umbrella of Sprint and Brightstar. We have already put measures in place to prevent a recurrence.”
The MarketWatch website reported that Softbank added: “We are not fully in agreement with parts of this outcome. The subsidiaries come under US jurisdiction, and having their income taxed in Japan constitutes double taxation.”
Judge turns back businessman’s challenge
Finance takes control of the gaming industry
Island faltering on energy, says expert
Electric bus plan in the pipeline
Woman caught at airport with cocaine
Scott backs independence of BTA
Supergirl from Quebec
Thieves target boats on Foot of the Lane
Take Our Poll
- "What are your views on anonymous online commenting (trolling)?"
- Helpful to our democracy and needs to continue
- Hurtful to our democracy and needs to end
- Limits the number of people willing to give public service
- An important tool for political parties
- Total Votes: 4508
- Poll Archive