Shanghai-based game developer Yota Games recently faced a significant tax collection event from the Tokyo National Tax Bureau. It was reported that Yota Games was additionally assessed approximately ¥1.8 billion (approximately ¥86.28 million) in taxes by the Tokyo National Tax Bureau, including fees such as "additional tax for non-declaration". This decision was made due to Yota Games' failure to pay consumption taxes totaling approximately ¥1.5 billion (approximately ¥71.8 million) generated from Japanese users' purchases of in-game items and other related transactions over a three-year period ending in 2022.
In addition, the Tokyo National Tax Bureau took further action by seizing approximately ¥1.5 billion in claims that Yota Games held against its Japanese subsidiary. This measure demonstrates the determination and severity of Japan's tax authorities in combating tax violations. The seizure of claims not only serves as an economic sanction against the company but also deals a severe blow to its credibility and operational capabilities.
This tax collection event has undoubtedly dealt a significant blow to Yota Games. As a game company registered in Hong Kong, China, and operating online games and other businesses in Japan, Yota Games has released several well-known mobile games globally, such as "Mafia City". However, this tax violation may adversely affect its operations in the Japanese market and may even spread to its global business.
On a deeper level, this incident also exposes the issues that Chinese game companies face in terms of tax compliance when going overseas. As more and more Chinese companies expand into overseas markets, tax compliance has become an issue that cannot be ignored. Tax regulations vary from country to country, and companies need to fully understand and comply with local tax regulations to avoid similar tax risks.
For Yota Games, this incident is undoubtedly a profound lesson. In the future, it needs to strengthen tax compliance management, establish sound tax management systems and internal control mechanisms, and ensure compliance with tax regulations in various countries worldwide. At the same time, it also needs to strengthen communication and cooperation with local tax authorities, stay informed about changes and developments in tax policies, and better address tax risks.
