Jiji Press NAGOYA (Jiji Press) — Toyota Motor Corp. has been ordered to pay more than ¥300 million in back taxes, including a penalty, for its failure to pay withholding income tax at home, mainly over its motor sports business abroad, it was learned Friday.
During an inspection, the Nagoya Regional Taxation Bureau found that the leading automaker failed to make the withholding tax payments for 2015-16 due to an accounting error, sources familiar with the matter said. Toyota has already paid the back tax, according to the sources.
Under Japanese tax law, companies that make payments to firms overseas must have a certain proportion of the amounts withheld for payments to Japanese tax authorities.
When Toyota paid fees for using vehicles and engines for a motor sport event to overseas companies including a German subsidiary, it paid such withholding tax abroad although it should have been paid in Japan, the sources said.
This year, Toyota joined the World Rally Championship for the first time in 18 years. Toyota won two of the eleven WRC races held so far, using a vehicle based on its Yaris car.