B'z production company failed to declare 840 mil. yen income.
The production company of the Japanese pop music duo B'z failed to declare about 840 million yen in taxable income in the two business years through September 1999, but has now paid the necessary tax, including penalties, industrial sources said Monday.
The Tokyo Regional Taxation Bureau imposed about 400 million yen in back taxes and penalties on B.U.M., a Tokyo-based music production company, for intentionally concealing the income, the sources said.
Takahiro Matsumoto, guitarist of B'z, serves as president of B.U.M. and his partner, vocalist Koshi Inaba, serves as director, the sources said.
B.U.M. handles all aspects of the band's management, including planning live tours, promotion and video production.
According to the sources, B.U.M. concealed the income during the two years by using affiliated companies to declare fictitious expenses for concert tours.
B'z, a hugely popular male duo, has had several hit albums, with its two best sellers, ''Pleasure'' and ''Treasure'' selling a total of more than 10 million copies in 1998.
Inaba and Matsumoto were ranked first and second this year on the list of top payers of income taxes for musicians.
Tickets for concerts by the popular duo invariably sell out the first day they go on sale, and their tours drew over 650,000 people to concerts in seven locations nationwide in 1999, a period subject to the tax bureau's scrutiny, the sources said.
There has therefore been some suspicion in the music industry as to why B.U.M. has not achieved significant profits during the past few years.
In a bid to file a criminal complaint with police, tax authorities initially conducted a compulsory investigation of B.U.M. and its affiliates.
However, further investigation by the Tokyo Regional Taxation Bureau revealed that B.U.M. transferred some of its profits to one of its affiliates, which in turn declared the income to the taxation authority.
Since the transfer between the two companies did not produce significant profit in comparison to what the two would have otherwise declared, the Tokyo Regional Taxation Bureau decided to drop the criminal complaint against them, according to the sources.
A B.U.M. official said the affiliates were investigated by tax authorities, but stressed that the situation does not involve tax evasion and the company is not criminally accused, saying the allocated profits in each affiliate have been declared properly.