SoftBank Corrects 4 Years of Tax Filings -- WSJ

By Mayumi Negishi 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 19, 2018).

TOKYO -- SoftBank Group Corp., the operator of the world's largest technology fund, said it corrected four years of tax filings after Japanese authorities uncovered Yen93.9 billion (about $875 million) worth of unreported earnings at offshore subsidiaries.

The Tokyo Regional Taxation Bureau said SoftBank failed to report earnings at three subsidiaries, located in Bermuda and Singapore, of its U.S. telecom units Sprint Corp. and Brightstar Corp. for four years through March 2016. Bermuda has no corporate tax, while Singapore's is 17%. Taken against deferred losses, the omissions resulted in Yen3.7 billion in additional taxes for SoftBank, the company said.

The amendments come amid increased scrutiny of the use of tax havens by technology giants such as Google Inc., Apple Inc. and Amazon.com Inc. That increases the pressure on SoftBank, which fields billions of dollars worth of deals through multiple entities, to keep on top of revised tax codes and their impact on complex corporate and investment structures that span thousands of companies and their subsidiaries. Sprint and Brightstar alone have hundreds of subsidiaries around the world.

The two companies in Bermuda had revenue from insurance fees, while the one in Singapore had revenue from used handset sales, the Asahi daily reported earlier.

"We are not fully in agreement with parts of this outcome," SoftBank said in a statement. The subsidiaries come under U.S. jurisdiction, and having their income taxed in Japan constitutes double taxation, it said.

SoftBank manages the Saudi-backed $92 billion SoftBank Vision Fund and a $6 billion affiliate fund, a network of investment arms through which it makes smaller investments, and well over a thousand companies it has invested in.

Write to Mayumi Negishi at [e-mail]

(END) Dow Jones Newswires

April 19, 2018 02:47 ET (06:47 GMT)

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