Tokyo Women's Medical University pointed out that approximately 2 million yen had not been declared on funds provided by multiple pharmaceutical companies and had not been taxed as "contract research expenses" because the Tokyo Regional Taxation Bureau judged that the results of its research were not disclosed, and pointed out that approximately 5000 million yen was levied in additional taxes, including under-declaration additional tax.
The additional tax was levied by Tokyo Women's Medical University, an educational corporation located in Shinjuku Ward, Tokyo.
According to the people involved, the university treated the funds received from multiple pharmaceutical companies for conducting clinical trials to investigate the efficacy of drugs as "contract research expenses" that are not subject to taxation and did not file tax returns.
"Commissioned research funds" received by private universities are subject to tax exemption only if the university publishes the research results or a part of the research results belong to the university, but the Tokyo Regional Taxation Bureau has determined that none of these conditions are met as a result of the tax audit. It seems that the university judged that the funds received from the pharmaceutical company were equivalent to the contracting income of the business.
For this reason, the Tokyo Regional Taxation Bureau pointed out that approximately 3 million yen was not declared in the five years to March last year, and added about 5 million yen including the under-declaration additional tax.
The tax exemption for "Commissioned Research Funds" is closely related to education and research activities and is exceptionally recognized as having public interest, and the requirements for tax exemption have been greatly relaxed against the background of a decrease in fiscal expenditure to private universities.
In response to an interview with NHK, a lawyer representing Tokyo Women's Medical University commented, "Based on the recommendations of the National Tax Bureau, we have filed an amended tax return and completed additional tax payments.
Many private universities did not file tax returns for "contract research funds" that universities receive from pharmaceutical companies for new drug development until the late 1990s, claiming that research funds are used for medical research.
On the other hand, the National Tax Authority has imposed taxation on private universities whose tax audits reveal omissions in tax audits, saying that "contract research expenses" are income earned by universities from contracting work from pharmaceutical companies, etc., and that there are cases where it is not clear how they are used.
A tax audit conducted in 1996 pointed out that a total of 11.18 billion yen was not declared to 1998 private universities nationwide, and in some cases, "contract research funds" were diverted to food and beverage expenses and personal taxi fares of medical school officials.
On the other hand, organizations created by private universities nationwide argued that improvements had been made, such as receiving research funds in a lump sum by the university secretariat instead of individuals, and that commissioned research was of high public interest and that it was unfair because national universities would be exempt from corporate tax even if they did the same research. Some of them, such as nurse personnel expenses, are now exempt from taxation.
In 2002, a new standard was established to exempt from taxation, but the organization continued to demand that "financial expenditure on private universities is decreasing, and that multiple sources of income are needed to strengthen international competitiveness."
In April 2017, the requirement for "contract research funds" to be exempt from tax was greatly relaxed, and it became tax-exempt if either the research results are published or a part of the research results belong to the university.
Professor Hiroaki Kobayashi of Aoyama Gakuin University Graduate School, who is an expert in tax administration, said, "The tax exemption of 'Commissioned Research Funds' is closely related to education and research activities and is exceptionally recognized as having public interest, but if the results of research are 4% owned by a company, the theory that it is for public interest purposes will no longer hold. It is required to be complied with."