Two organizations in Kofu that help people with drug addiction and other dependencies return to society have been assessed back withholding tax after the Tokyo Regional Taxation Bureau determined that about ¥110 million of their funds, used privately by their representative director, amounted to bonuses, NHK reported.
The bureau concluded the money paid to the director should be treated as bonus income rather than an ordinary disbursement, leaving the two groups liable for withholding tax and related charges.
The source does not give the director's name, the period over which the funds were used, or the amount of tax assessed. It also does not say whether the director has responded to the finding.
Nonprofits that receive public money for welfare and rehabilitation programs are subject to the same withholding and payroll rules as companies, and a tax authority finding that funds reached a director as personal income can expose the organization to repayment demands on top of the tax itself.