The representative director of Yamanashi Daruque Honbu, a general incorporated association in Kofu that runs private rehabilitation facilities for people with drug dependence and other conditions, diverted about ¥110 million in corporate funds over the seven years to 2025, a tax investigation by the Tokyo Regional Taxation Bureau found.
The bureau identified unpaid withholding income tax on the diverted money at the association and one other corporation, and assessed about ¥47 million in back taxes, including heavy additional tax.
Cash drawn as living expenses
The two corporations run their facilities on fees paid by residents, according to people familiar with the matter. The representative director withdrew cash from corporate funds under the label of living expenses paid to residents and used it for food, drink and other costs, they said.
The bureau treated the diverted money as a bonus paid by the corporations to the representative director. It found the two corporations should have withheld and paid about ¥35 million in income tax, according to the people.
Tax break ruled out for some programs
The two corporations hold a tax status that exempts them from tax on activities other than profit-making business. The bureau judged that some of the programs residents take part in, including daily-living training, count as profit-making business.
It therefore found about ¥300 million in unreported corporate income and assessed about ¥87 million in back taxes, including additional tax for failure to file.
Daruque facilities, found around the country, support people who want to recover from drug dependence. Yamanashi Daruque was established in 2008.
Yamanashi Daruque Honbu told the Asahi Shimbun it had not diverted funds for private use, and that it had discussed the tax matter with the tax office and settled it properly.