Panasonic Corp. said Sept. 11 that it disagrees with the Osaka Regional Tax Bureau's decision to ask the company to correct its corporate income taxes and impose additional taxes for the fiscal years ended March 2016 and 2017 and will immediately file an appeal.
Since August 2017, the Japanese consumer electronics producer has been under investigation by Osaka's tax authorities over the correction of taxable income equivalent to ¥42.1 billion, of which ¥41.2 billion was in relation to sales of shares of Panasonic Corp. of North America Inc. to Panasonic Holding Netherlands BV as part of a restructuring.
In a notice sent to the company, the tax authorities said they have determined that the selling price was lower than fair market value and the amount discrepancy should be deemed "donation" to foreign affiliates. Panasonic insists that its selling price of the shares was reasonable and that there was no donation to foreign affiliates.
The company said its decision not to recognize any additional taxes on the matter is in line with international financial reporting standards.
Panasonic said it will not show any financial impact of the additional income tax in its consolidated income statement for the fiscal year ending March 2019 under IFRS guidelines but will record nearly ¥6 billion of additional corporate income tax, in accordance to Japan's accounting standards, in its parent-alone financial statements for fiscal 2019.
As of Sept. 11, US$1 was equivalent to 111.51 Japanese yen.