Takeda faces 57B yen tax bill regarding TAP

Japanese drugmaker Takeda says that the Osaka Regional Taxation Bureau has charged it with failing to report income of 120.0 billion yen ($1.03 billion) over the six years ending March 2005. The income in question is derived from the firm's transactions with its USA-based joint venture TAP Pharmaceutical, which is a 50-50 owned company with US health care major Abbott Laboratories.

The Bureau maintains that the transactions were subject to transfer price taxation, which is a penalty charge that is used when a firm is found to have exported its products to overseas affiliates at lower prices than to non-affiliated companies. The body has concluded that Takeda should have received more revenue through the transactions in the period, and that the money had been transferred to the joint venture. The company has been ordered to pay 57.0 billion yen taxes and 39.0 billion in penalty tax.

In response, Takeda said that the order was unacceptable, adding that it was necessary to obtain consent from the overseas partner in question before setting prices, and it was therefore out of its control.