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NEWS: ufotable Founder Hikaru Kondo Admits to Evading 138 Million Yen in Taxes

Ufotable likes to treat their employees well, as oppose to other studios, and this tax evasion issue was because it was a way to invest in its employees. As an english only person I cant really look into the details and investigate myself.

casenumber00 wrote:

Ufotable likes to treat their employees well, as oppose to other studios, and this tax evasion issue was because it was a way to invest in its employees. As an english only person I cant really look into the details and investigate myself.

That seems like an incredible stretch. "We only evaded taxes because we care about our employees" sounds like line made up in a board room meeting about what to say in case they got caught. They did it for the reason anyone embezzles or evades taxes, greed.

I've been following this since it started but no one has said exactly why he did it. Canipa Effect on youtube, Callium May who writes articles for ANN once in awhile, made a brief mention in one of his most recent videos, "Breaking Down Demon Slayer the Movie: Mugen Train's Incredible Animation | Animator Spotlight", around 3:45, did mention that ufotable likes to treat their employees well, as oppose to other studios, and this tax evasion issue was because it was a way to invest in its employees. As an english only person I cant really look into the details and investigate myself.

It feels to me like people believe UFO Table has a better grasp on accounting than other animation studios, and you would likely be overestimating them quite a lot.

While they are one of the best animation studios, accounting is not usually great in animation studios, since they don't feel the "need" to have perfect control over everything, they are artists after all, and it shows. Even if some people think the better treatment of their artists in Ufotable is because of a better dsitribution of funds, it's usually more of a mindset and strategy of internal priorities.

It has been more than researched that 90% of businesses, regardless of size, don't have an accurate control of their accountings (imagine animation studios now), and many times, certain expenditures, income, or otherwise is labelled differently between them, which results in completely different accounting books even if the companies have extremely similar business models and activities.

Add to this that the government's tax office KNOWS what you do, where you spend your money, and they have access to a lot more information than people believe. What usually happens, and the reason why so many companies are condemned for fraud is not because of any ill-will (there are people who do it with evasion in mind, but that's not the most common problem, which is what I'm trying to explain here), they aren't actively trying to evade taxes, but rather, their accounting is different from what the tax office interprets, and so they send over a letter of payment for overdue taxes.

Once you get that letter, you have a certain amount of time to appeal it, which is what Ufotable probably did here, and then both parties have a first behind the scenes encounter, usually by correspondence, in which the company presents an explanation why their accounting is the way it is, and why the tax office version is wrong, or, they present a correction and wait for the tax office to approve it.

If the above doesn't go through, then the tax office will bring the case to court, which is what happened here. In this case, apparently, Ufotable had evaded taxes, and so they must pay back what they owe, plus extra for all the trouble and the overdue date.

However, it isn't always like this, and more often than not the tax office will send you a letter demanding you pay when even they know you should not have to (they will try to rake in anything they can, it's what they are instructed to do), but due to how your accounting books look, and the information they have, certain things can be interpreted differently, and they try to pass those through, resulting in unpaid taxes when the calculations are done. They even get very adamant on certain cases, bringing them to court, but they can be defeated even if it takes years.

In the end, we will not know if Ufotable really did try to evade taxes, if it was a difference in interpretation between the TO and the company, something Ufotable overlooked, or if the Tax Office simply wanted to get a load of cash because Ufotable's accounting was loose and they knew they could profit from it (because remember, they are an Animation studio, and how many of these have gone bankrupt because of accounting issues?).

It's kind of silly when I see people point fingers at their CEO saying "BAD!" and being proud of the "good" tax office, when the truth is far murkier than anyone even wants to know.

casenumber00 wrote:

I've been following this since it started but no one has said exactly why he did it. Canipa Effect on youtube, Callium May who writes articles for ANN once in awhile, made a brief mention in one of his most recent videos, "Breaking Down Demon Slayer the Movie: Mugen Train's Incredible Animation | Animator Spotlight", around 3:45, did mention that ufotable likes to treat their employees well, as oppose to other studios, and this tax evasion issue was because it was a way to invest in its employees. As an english only person I cant really look into the details and investigate myself.

evading paying taxes, in other wrods, doing something illegal that threatens the company as a whole doesnt seem like a way to "treat your employees well" Why treat people to gifts and all if the company is going to go bankrupt from it. senseless.

regardless, the dude was hiding money in a safe at home, how is that investing in your employees? invest in the company with your profits instead better.

They should invest in granting maternity leave for their employees too.

chronos02 wrote:

It feels to me like people believe UFO Table has a better grasp on accounting than other animation studios, and you would likely be overestimating them quite a lot. While they are one of the best animation studios, accounting is not usually great in animation studios, since they don't feel the "need" to have perfect control over everything, they are artists after all, and it shows. Even if some people think the better treatment of their artists in Ufotable is because of a better dsitribution of funds, it's usually more of a mindset and strategy of internal priorities. It has been more than researched that 90% of businesses, regardless of size, don't have an accurate control of their accountings (imagine animation studios now), and many times, certain expenditures, income, or otherwise is labelled differently between them, which results in completely different accounting books even if the companies have extremely similar business models and activities. Add to this that the government's tax office KNOWS what you do, where you spend your money, and they have access to a lot more information than people believe. What usually happens, and the reason why so many companies are condemned for fraud is not because of any ill-will (there are people who do it with evasion in mind, but that's not the most common problem, which is what I'm trying to explain here), they aren't actively trying to evade taxes, but rather, their accounting is different from what the tax office interprets, and so they send over a letter of payment for overdue taxes. Once you get that letter, you have a certain amount of time to appeal it, which is what Ufotable probably did here, and then both parties have a first behind the scenes encounter, usually by correspondence, in which the company presents an explanation why their accounting is the way it is, and why the tax office version is wrong, or, they present a correction and wait for the tax office to approve it. If the above doesn't go through, then the tax office will bring the case to court, which is what happened here. In this case, apparently, Ufotable had evaded taxes, and so they must pay back what they owe, plus extra for all the trouble and the overdue date. However, it isn't always like this, and more often than not the tax office will send you a letter demanding you pay when even they know you should not have to (they will try to rake in anything they can, it's what they are instructed to do), but due to how your accounting books look, and the information they have, certain things can be interpreted differently, and they try to pass those through, resulting in unpaid taxes when the calculations are done. They even get very adamant on certain cases, bringing them to court, but they can be defeated even if it takes years. In the end, we will not know if Ufotable really did try to evade taxes, if it was a difference in interpretation between the TO and the company, something Ufotable overlooked, or if the Tax Office simply wanted to get a load of cash because Ufotable's accounting was loose and they knew they could profit from it (because remember, they are an Animation studio, and how many of these have gone bankrupt because of accounting issues?). It's kind of silly when I see people point fingers at their CEO saying "BAD!" and being proud of the "good" tax office, when the truth is far murkier than anyone even wants to know.

This sure is a lot of words to get to “we’ll never know if they actually did it” when you can read the actual article for a list of what was done or literally google it and see additional reporting on what Kondo did. In addition to generally under reporting studio profits to evade taxes, UFOtable ran a series of cafes, which Kondo diverted profits from to UFOTable as a company while literally hiding that money in a safe in his home for personal use. They also took disaster relief meant to help their employees and pocketed it for company spending. This wishy-washy “taxes are hard so we don’t know if they really did anything wrong” is astoundingly off point.

two things, the under reporting was from the cafe, the animation studio money doesn't seem to have been touched, and i am not sure about it being for personal use since it seems all the money wasn't was left untouched in the safe

The prosecution said in its opening statement that ufotable and Kondo hid part of the income from the company's cafes and merchandise from 2015 to 2018 in order to buffet against future downturns in business. The studio allegedly hid about 441 million yen (about US$4 million) in income.

Dab1za9 wrote:

two things, the under reporting was from the cafe, the animation studio money doesn't seem to have been touched, and i am not sure about it being for personal use since it seems all the money wasn't was left untouched in the safe

Is your argument really "This man who admitted to avoiding taxes only had MOST of the missing money stashed in his safe, so it wasn't for personal use?"