MOL to face $58m back taxes
Mitsui OSK Lines (MOL) said that the Tokyo Regional Taxation Bureau is expected to inform the company that it has failed to declare about US$115.5 million in taxable income related to transactions with a US subsidiary, Jiji Press reported.
As a result, the bureau is expected to order MOL to pay some $58.3 million in back taxes and penalties, the shipping company said.
But the company said it completely disagrees with the tax authorities.
If the tax office issues the corrective order, the company would file an objection calling for the withdrawal of the action and demand that Japanese and US taxation authorities discuss the matter to prevent double taxation, MOL said.
The taxation bureau determined that cargo handling fees paid to the subsidiary between fiscal 2002 and fiscal 2008 were excessively higher than market prices and constituted an income transfer to the subsidiary in the United States, where the corporate tax rate is lower.
MOL said the fees were appropriate in line with market prices. Container terminal usage fees paid to the subsidiary were regarded as donations, not costs, the company also said.
As a result, the bureau is expected to order MOL to pay some $58.3 million in back taxes and penalties, the shipping company said.
But the company said it completely disagrees with the tax authorities.
If the tax office issues the corrective order, the company would file an objection calling for the withdrawal of the action and demand that Japanese and US taxation authorities discuss the matter to prevent double taxation, MOL said.
The taxation bureau determined that cargo handling fees paid to the subsidiary between fiscal 2002 and fiscal 2008 were excessively higher than market prices and constituted an income transfer to the subsidiary in the United States, where the corporate tax rate is lower.
MOL said the fees were appropriate in line with market prices. Container terminal usage fees paid to the subsidiary were regarded as donations, not costs, the company also said.