The ufotable tax evasion scandal has come back into the headlines after a year of silence. The Demon Slayer movie creators have allegedly been charged with hiding millions in unpaid taxes.
According to the Mainichi Shimbun Japanese newspaper, the Tokyo Public Prosecutors Office charged ufotable founder and President Hikaru Kondo and the anime studio with evading 139 million yen (which is about $1.28 million in U.S. dollars).
The company allegedly hid about 30 percent of the income from their Tokyo anime restaurants in a safe at a private home. From 2015 through 2018, ufotable allegedly altered its accounting ledgers to hide about 446 million yen ($4.11 million).
This meant they avoided millions in corporate and consumption taxes. The source cited by the news site claims that Kondo used the unpaid tax money to fund ufotable studio and its various anime projects.
However, a lawyer for Kondo claims that Kondo has already filled an updated tax return and paid back the taxes owed.
“We have already filed a revised tax return and paid the tax in full,” said the lawyer on Kondo’s behalf. “We apologize for the inconvenience caused to our fans and other related parties. I will work hard to make it happen.”
Separately, ufotable’s tax evasion scandal was addressed by the company on its official Twitter page.
“Recently, our company and our representative were accused by the Tokyo National Taxation Bureau on suspicion of violation of the [Corporation Tax Act and Consumption Tax Act]. We sincerely apologize to all the fans and people concerned. We made an amended tax return according to the guidance of the national tax authorities and paid the full amount of tax. We will strive to comply with the law and optimize management in order to improve the production environment.”
The ufotable scandal affects charity events
Starting in April 2019, reports came out that Ufotable owed millions in unpaid taxes. Worse, the company allegedly misappropriated charity auction funds that were supposed to go to victims of the 2011 Tohoku earthquake.
“The investigation is still ongoing, but the tax evasion amount we know here is 4 Billion yen,” said an investigator from the Tokyo Regional Taxation Bureau in the report by Weekly Bunshun Magazine. “The additional tax will be 200 million yen.”
At the time, the Bureau searched Ufotable’s offices and even their cafes (which sell anime-related merchandise) as part of the tax evasion investigation. Demon Slayer producer Kondo allegedly spent days at home consulting with lawyers before returning to work in early 2019.
Concerning the earthquake charity, Ufotable also hosts a town revival event called Machi Asobi, held twice a year. According to reports, Ufotable may have committed fraudulent accounting.
“Even though charity auctions are being carried out for the reconstruction of the disaster area, if their earnings are used in different ways, fraud charges of Article 246 of the Penal Code may result in imprisonment of 10 years or less,” explained lawyer Toshiaki Kobayashi.
“In addition, if the corporation does not properly declare the revenue to be recorded, it will be a violation of corporate tax law, that is, tax evasion.”
Shortly after these reports were published, Kondo resigned as chairman of the executive committee for Machi Asobi. At the time, Kondo did not provide a reason for stepping down.
Will the Demon Slayer movie and its anime sequels be affected by the scandal?
Will the ufotable tax evasion scandal cause any repercussions for the anime production of the Demon Slayer movie, never mind Demon Slayer Season 2?
It’s still too soon to tell since the investigation is still ongoing.
Titled Demon Slayer: Demon Train Arc (Kimetsu no Yaiba: Mugen Ressha-Hen), the Demon Slayer movie is scheduled to release in Japanese movie theaters in October 2020.
There has not been any announcement of a Demon Slayer movie release date for U.S. theaters.
The Demon Slayer manga’s ending was released in May 2020. Based on the way the story finished, it’s very likely that a Demon Slayer Season 3 anime could be the ending of the anime series, as well.
The anime studio is also well known for its adaptation of Type Moon’s Fate franchise.
The final movie in the Fate/stay night: Heaven’s Feel trilogy was delayed, but the cause was Japanese theaters closing due to COVID-19 and the effects of the SARS-COV-2 coronavirus pandemic, not ufotable’s tax evasion scandal.
Even if no one serves prison time due to the tax evasion, let’s hope the company has enough cash available to pay back both the taxes owed and to continue ufotable’s production schedule without any hiccups.