Olympus Said Facing Y5 Billion Back Tax from Deal

TOKYO (Nikkei)--Olympus Corp. (OCPNY) has been assessed 5 billion yen in back taxes and penalties by the Tokyo Regional Taxation Bureau stemming from its acquisition of U.K. medical equipment firm Gyrus Group Plc in 2008, The Nikkei reported early Wednesday.

Following the completion of a criminal investigation into Olympus' earnings falsification by the Tokyo District Public Prosecutors Office and others, the taxation bureau audited the scandal-tainted company. This led to the assessment that the major Japanese precision equipment maker under-reported its income by about Y15 billion for the five years through March 2011.

The undeclared Y15 billion is what Olympus claimed to have paid for financial advice it received in relation to its acquisition of Gyrus. But it has since been found that the funds were in fact used to secretly write off a portion of its concealed losses, which successive management at the company had hid by falsifying financial statements.

The taxation bureau is believed to have ruled that the Y15 billion doesn't qualify as an expense for the acquisition and decided to seek roughly Y5 billion in back taxes and penalties.