Google LLC's Japanese unit understated its 2015 revenues, resulting in a tax bill of about ¥1 billion, The Japan Times reported, citing a source close to the matter.
Google Japan reportedly failed to declare about ¥3.5 billion in income for 2015. A source said the Alphabet Inc. unit sold advertising and other services in Japan but client payments were made to Google's branch in Singapore, where tax rates are lower.
The source added that the Japanese unit of Google received remunerations equal to its overall business expenses, with an additional 8% commission from the Singapore office. Tax authorities reportedly pointed out that the company's remunerations failed to match its advertising revenue.
As a result, Google Japan had to pay back taxes and penalties amounting to about ¥1 billion. Google Japan also voluntarily reported an extra ¥6 billion in corporate income for 2016, according to the report.
As of Jan. 15, US$1 was equivalent to ¥108.62.