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GameSpot Video Games, PC, Wii, PlayStation 2, GameCube, PSP, DS, GBA, PS2, PS3, Xbox 360, PlayStation 3

Sony sore over huge bill for additional taxes

Tokyo tax authority says electronics giant owes an extra $244 million due to underreporting in its games business.
By Walt Wyman, GameSpot
Posted Jun 30, 2006 10:29 am PT

The Tokyo Regional Tax Bureau served Sony and Sony Computer Entertainment with a notice for 74.4 billion yen (about $650 million) in unreported income, ITmedia reported today. As a result, the tax authority claims that Sony owes about 27.9 billion (over $244 million) in additional taxes. Both Sony and SCE plan to protest the taxes, as is evident from the statement they released today condemning the tax bureau's behavior: "We have always made appropriate tax payments in compliance with the tax codes of [the relevant] countries; this notice [from the tax bureau] is unsatisfactory."

The penalty stems from the "transfer price tax system," which is designed to prevent companies from performing transactions between their domestic and overseas affiliates at lower than usual prices. The allegedly unreported revenues are related to transactions between SCE and its US subsidiaries in connection with its game business between FY 1999 and 2004, and CD and DVD disc transactions between Sony and multiple overseas subsidiaries from FY 2003 to 2004. The tax authorities hold that Sony was under obligation to report these transactions as they occurred at lower than normal prices.

For its part, Sony and SCE have stated "we are confident we can avoid this double taxation" by invoking [international] tax treaties to open bilateral talks.

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321 Comments

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Cypher_VR

sony better not pass the buck to us in terms of higher price products,
that would alienate sony fans

Posted Jul 5, 2006 7:55 pm PT
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supine

Sony, you need to slap an Apple sticker on the PS3 and sell it for 2000$!! You said yourself that this was possible, right?

Also, since it can run ANY OS "Just like any other application". It includes the BD-ROM - the guaranteed next format standard. Can prosess a wooping 2 TFLOPS..... and it has that game with giant crabs!! It's a must buy.... isn't it?

good luck

Posted Jul 5, 2006 2:03 pm PT
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0li

I for one want sony to keep going so they can give us more gold next E3.

Riiiiiiiiiige Racceeerrrr!

Posted Jul 5, 2006 12:12 pm PT
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SoralinkGS

This isn't good.

Posted Jul 5, 2006 11:40 am PT
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RanXer0x

There is nothing about this news that is good. I'm not saying that Sony deserves or doesn't deserve the hit. But all the bad news is pointing to Sony doing something wrong down the line.

If this doesn't tank Sony, I would be surprised. What, with the cuts/downsizing they have had to do recently.

This is just bad for everyone, if M$ has no competition. There would be no reason for discounted prices, as the demand would be retardedly high. eh.

Posted Jul 5, 2006 11:23 am PT
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Deimos27

Hehe... Wif de $600 +++ pricetag on their 'next-gen' console, im sure they will be able to pay off that tax. Er, wait a minute, or is bcos of de tax they are making it $600+++???

Posted Jul 5, 2006 10:59 am PT
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richmini9_basic

I don't think Gamespot is doing anything that the other game sites aren't. I've always thought that 1up had a Sony bias, but they have been posting just as many less than flatering articles about Sony as any other site. Between the $600 price point, and all of the bad PR moves, it's no wonder their is so much negitive press out there. It's not like these story are being made up.

Posted Jul 5, 2006 10:02 am PT
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thatguytony

claymeow said it so well, all these articles do is bring out all the moronic fanboys. I'm so tired of all the trash talk on this site. If people aren't trash talking other peoples country of birth or nationality, they are bickering over which game company is better. Sure I have become frustrated with Sony's apparent arrogance ( look what happened to Nintendo when they thought they were unbeatable ), but the PS3 isn't even out yet, so lets not write them off yet. I guess its to much to ask that people stop being biased jerks who seem more concerened with starting flamewars then actually posting intelligent comments and being respectful of other peoples opinions.

Posted Jul 5, 2006 9:53 am PT
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drummerboykhari

too bad for sony.microsoft is better.and always was better

Posted Jul 5, 2006 9:51 am PT
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ClayMeow

All these articles ever do is bring out the dumbass fanboys making ridiculous dumbfounded comments. Just look at some of the idiotic posts prior to mine. And this goes for MS and Sony fanboys. You're both as bad as the other.

Posted Jul 5, 2006 9:34 am PT
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chrisdojo

LOL...... how many ways can sony own themselves?

Posted Jul 5, 2006 7:47 am PT
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Hobosean88

LOL sony is dying a slow death and the PS3 isnt even out.
Go Microsoft!

Posted Jul 5, 2006 7:10 am PT
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Autolycus

MS haters are just jealous. Plain and simple. Bill Gates knows how to run a business. Thats why its succesfull. And for all you retards that are in control of other employees, Micrsoft did well because they paid there employees well and understand how important they are. ITS TRUE, DEAL WITH IT.

Posted Jul 5, 2006 5:43 am PT
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dlp22476

Stop hating on MS like its the evil empire or something. The presence of MS helps our economy in this country greatly. Also MS already went thru this just in a worse form with all the anti-trust lawsuits. MS and sony make good games for the consumer. Like it was said earlier competition only helps the consumer.

Posted Jul 5, 2006 1:07 am PT
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Fiku42

now if only if this was M$ instead....o well things happen its not the end of the world anyway

Posted Jul 4, 2006 10:15 pm PT
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Fiku42

meh....why cant something like this happen to microsoft...there like a big rich evil company to me...

Posted Jul 4, 2006 10:13 pm PT
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greatmagnus

Sony is going downt he drain by the looks of it. Unless they do something major with the PS3 their game division is going down the drain.

Posted Jul 4, 2006 9:43 pm PT
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maaly81

Sony might be headed toward a crash in there business--hope they are just getting haggled and its not true--but if it is, then they will have to pay something

Posted Jul 4, 2006 9:37 pm PT
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Omali

"As for Sony being evil - while I think they're small fries compared to MS (or even the "velvet glove, iron fist" of Apple)"

I'm pretty sure that would be the velvet glove, chinese-sweatshop-ipod making fist of apple.

Posted Jul 4, 2006 7:04 pm PT
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samuraibambi

iso läjä kahisevaa tossa kyllä

Posted Jul 4, 2006 5:21 pm PT
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hemakm3

Sorry Sony

Posted Jul 4, 2006 4:53 pm PT
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calducciano

While heartbreaking, it's refreshing to know that the U.S. government isn't the only one that steals money that they didn't earn. Taxation without representation anyone? I'm rooting for Sony but whatcha gonna do...

Posted Jul 4, 2006 4:15 pm PT
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Conanfan1

That really sucks for Sony. I hope this doesn't end up affecting the consumer.

Posted Jul 4, 2006 1:45 pm PT
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evilmonkey998

happy 4th of July

Posted Jul 4, 2006 1:39 pm PT
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remmbermytitans

rofl

Posted Jul 4, 2006 1:06 pm PT
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UltimaCloudX

Ah Sony, how you keep our daily lives entertained with drama. I'm sure PS3 will sellout on the first wave or so, even with the high pricetag... but if the games end up being more than $59.99USD, It's over for them. Some hardcore gamers would pay it, but the average consumer generally has more important things to pay for than high prices for videogames/systems.

Gamefly ftw.

Posted Jul 4, 2006 12:51 pm PT
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basketcasetct

sony is not doing so well

Posted Jul 4, 2006 10:41 am PT
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pohlkat

Yep, sony in the bucket
Go wii

Posted Jul 4, 2006 9:48 am PT
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AcolyteV1

Given Sony's recent attempts to dodge UK taxes by claiming the PS2 is a PC, somehow, this news does not surprise me in the least.

Posted Jul 4, 2006 7:39 am PT
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killer_shadow1

sony wont die

Posted Jul 4, 2006 3:55 am PT
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Ponsardin

Sounds like Sony has problems with the Tokyo tax authority...

Posted Jul 4, 2006 2:28 am PT
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GeneralFighter

I don't think SONY will fall~ cause Its got sharers in almost every category!

Posted Jul 3, 2006 11:11 pm PT
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metdevthegamer

[This message was deleted at the request of the original poster]

Posted Jul 3, 2006 10:56 pm PT
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I_AM_SOLIDSTATE

[This message was deleted at the request of a moderator or administrator]

Posted Jul 3, 2006 10:27 pm PT
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PSDUDE

I never knew what a fanboy was until I got to Gamespot. Lots of b*tching and complaining about random, stupid stuff. It's one thing to insult a company you don't support, but throwing insults towards people that buy products from a certain company really shows who the real DUMMIES are. For those that didn't realize, more competition means better products for your buck. *sighs*

GO ALL SYSTEMS!

Posted Jul 3, 2006 10:24 pm PT
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rynmls

everything is againsts sony right now...

Posted Jul 3, 2006 10:17 pm PT
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Optimusv2

Blu ray most important thing?? HAHHAHAHAHHA Its THE most useless thing on the damn console. Stop falling for Sony's marketing bs please...

Posted Jul 3, 2006 9:30 pm PT
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koolgg

here comes the Wii in the number 1 spot

Posted Jul 3, 2006 8:31 pm PT
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Toomai

There's pretty much 0 gaming news this time of year, so they need something to report.

Posted Jul 3, 2006 7:10 pm PT
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kaito2

I'm not a Sony fan, but this is absurd. This seems quite common in Japan, and other countries--the government "discovers" some clause in a subjective law and. . .cha-ching, free money. It's like some sick contest, where the government tries to see how many companies it can tax into bankruptcy.

Posted Jul 3, 2006 6:52 pm PT
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CommonerChaos

cardiac, get off of sony nuts you fan boy. All 3 companys are great....

Posted Jul 3, 2006 5:03 pm PT
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nev70

jared81799
undoubtly sony is getting sum bad press lately. this is just nutz. wonder how many masterchief nipple suckers are going to jump on this. Alright then that is going to to hurt big time if they lose this it may well help to depress their share price further ...ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ...........................

Posted Jul 3, 2006 4:33 pm PT
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SocaWarrior

dis crap is crazy. I kno they got mad ppl on here makin fun of dem.. TOo bad

Posted Jul 3, 2006 4:22 pm PT
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princeofgames90

well its a bad thing to sony but for the post that said remove the blu ray Wtf are you saying the blu ray is the most important thing

Posted Jul 3, 2006 3:15 pm PT
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Gunslingers

ooooooooooooooooo oooooccchhhhhhhhhhhhhhhhhhh ooooooooo that hurts mannnnnn

Posted Jul 3, 2006 2:18 pm PT
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zyxe

sony must have smited the gods! what a string of badness...

Posted Jul 3, 2006 2:18 pm PT
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Quintox

PS2 FTW, now I'm getting a 360

Posted Jul 3, 2006 2:02 pm PT
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MrPoKeMoN_2005

I think the only thing that can save the PS3 if they took out the BLUERAY.

Posted Jul 3, 2006 1:38 pm PT
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Digital-Devil

I have never seen so many idiots post in one topic

Posted Jul 3, 2006 12:18 pm PT
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mafaka2

While reading all the comments I made a conclusion: You people just don't know wat you're talking about... . Sincerely it hurts just to know about this punch in sony's stomach, but you people (especialy for the frustated haters) just don't when to give up on saying plain stupid comments: " Ohh sony sucks!, mheee sony is near the end...!!!!."

Come on!!! Do you realy meant wat you're sayin? Strange is the fact that you guys hate so much a console/trademark for its success!!!!! I don't believe that Sony is going bankrupt just because of this problem, plus, to me PS3 is going to win alot of new followers and I believe that even with such a high price( for the top choice that includes more accessories) isn't going to make the sales down.

Saying that I only ask for those who hate so much this trademark to shut the hell up and work to buy things which you say that are expensive.

Posted Jul 3, 2006 12:11 pm PT
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