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SoftBank

SoftBank says it failed to report $378m in income

Tax bureau found miscalculations in FX losses and unreported overseas income

SoftBank failed to report 40 billion yen ($378.3 million) in income for the year ended March 2019, the tax bureau said.    © Reuters

TOKYO -- SoftBank Group said it had been told by Tokyo Regional Taxation Bureau that it had failed to report about 40 billion yen ($378.3 million) in income for the fiscal year that ended March 2019.

The tax department told SoftBank that it found miscalculations in foreign exchange losses, expenses recorded in incorrect periods and omissions of income from affiliated companies in tax havens.

"The National Tax Agency has informed us of errors in the timing of expense recording, conversion of debt denominated in foreign currencies and omissions of income from overseas affiliated companies," SoftBank told Nikkei. "We have submitted a corrected filing."

SoftBank recorded a loss of two trillion yen from the transfer of stocks between units within the group in 2018. About 400 billion yen of that was recorded in the fiscal year that ended March 2019. Those losses would offset the unreported income, meaning SoftBank will not face any additional tax burden.

According to a person familiar with the matter, about 17 billion yen of SoftBank's unreported total of 40 billion yen resulted from miscalculations related to foreign exchange losses. The exchange rate was incorrectly applied to dollar-denominated debt borrowed from a Japanese subsidiary, resulting in excessive losses, the person said.

Tax authorities also told SoftBank that it had overlooked 14 billion yen in payments to its overseas subsidiary that manages the SoftBank Vision Fund. SoftBank had withheld cash payments, so it could not record the sums as expenses, authorities said.

There was also a discrepancy in the provisional tax calculation and the final value reported by foreign affiliates held by Fortress Investment Group, which SoftBank acquired in 2017. That led to a correction of several billion yen.

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