Japan Press Weekly

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2016 April 20 - 26 TOP3 [ECONOMY]

99% of Japanese subsidiaries in Cayman Islands are shell companies: JCP Daimon

Japanese Communist Party parliamentarian Daimon Mikishi revealed on April 25 that almost all Japanese subsidiaries in the Cayman Islands are dummy companies, urging the government to levy duties on them appropriately.

In an Upper House Audit Committee session, Daimon referred to the so-called Panama Papers which were leaked recently. He noted that the number of fictitious companies which Japanese corporations formed in foreign countries where the corporate tax rates are less than 20% has exceeded 4,000.

Daimon pointed to the fact that 99% of all 531 Japanese subsidiaries in the Cayman Islands, where the total sum of investments from Japanese firms is the second largest after U.S. investors, are actually bogus companies. Citing the data released by Japan’s National Tax Agency, he pointed out that Japanese companies made profits of 2.8 trillion yen in fiscal 2014 by investing in the Caribbean islands and that the amount of their investment returns subject to taxation was only 175.5 billion yen (6.3%) in the same fiscal year.

“The global community is now working to strengthen taxation measures on corporations which are making use of tax havens to increase profits. The Japanese government should also implement drastic measures to control tax evasion,” stressed Daimon.

Finance Minister Aso Taro said in response that Japan’s role is to help the international community to implement such measures.

Past related article:
> Panama Papers shed light on dark side of international economy [April 12, 2016]