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DJ - Komatsu Suspected Of Failing To Declare Profits By Tokyo Tax Bureau -Kyodo

TOKYO (Dow Jones)--The Tokyo Regional Taxation Bureau suspects Komatsu Ltd. (6301.TO) of failing to declare some Y17.4 billion in due profits taxable in Japan over a period of six years to March 2009, Kyodo News reported Thursday citing the company.

Under the transfer pricing taxation system, the tax office has looked into the distribution of profits between the construction machinery maker and its British and Belgian subsidiaries and alleged that Komatsu reported profits that did not accurately reflect its earnings in Britain and Belgium, the company said.

Komatsu claimed it has "properly paid taxes on the profits from internal transactions" in Japan, Britain and Belgium.

The company said it is planning to challenge the tax office's coming decision for correction of profits.

Komatsu also intends to file for Japan's governmental negotiations with Britain and Belgium to avoid double taxation, expecting to receive tax refunds in the two European countries.

Komatsu said it is planning to book an allowance of some Y2.6 billion for the tax expense including the difference between additional tax payments in Japan and refunds in Britain and Belgium.



(END) Dow Jones Newswires

March 11, 2010 00:21 ET (05:21 GMT)