¥40 million including penalty paid over cash gifts to members of Japanese entertainment agency

The Yomiuri Shimbun

16:07 JST, December 28, 2022

Leading entertainment agency Johnny & Associates, Inc. and its two group companies have been ordered to pay about ¥40 million including penalty taxes over New Year’s gifts of cash that their president gave to performers belonging to the agency, The Yomiuri Shimbun has learned.

The taxes include withholding taxes and additional taxes for non-payment.

The Tokyo Regional Taxation Bureau investigated the three companies and concluded that the about ¥90 million given to performers over the five years to 2022 should not have been reported as tax-exempt expenses, according to sources.

Instead, the bureau deemed that this money constituted a bonus given to Julie Keiko Fujishima, the president of Johnny & Associates and the two group companies, which are involved in the production of goods and publishing.

Every January, Fujishima has given cash gifts to the performers who belong to her agency, and the three companies have reported this money as tax-exempt entertainment and social expenses. However, such expenses are defined as money spent by companies to entertain or purchase gifts for their clients and suppliers.

Tax authorities are therefore believed to have decided that the cash given to the agency’s own members should instead be considered as a bonus that the three companies provided to Fujishima.

The performers received several hundred thousand yen each at most, so they are free from paying gift taxes, the sources said.

Fujishima is a niece of Johnny Kitagawa, the founder of the agency. She became president after Kitagawa died at the age of 87 in July 2019.

“There was a difference of opinion, but we’ve already amended our tax statements and rendered payment as directed by the tax authorities,” the agency said.