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The Japanese arm of Google has paid about 1 billion yen ($9.2 million) in back taxes and penalties after failing to declare about 3.5 billion yen in income in 2015, sources said Jan. 15.

Google Japan LLC, headquartered in Tokyo’s Minato Ward, conducted transactions with the Singaporean arm of the U.S.-based Internet giant and transferred income to the island state, where the corporate tax rate is about half that of Japan’s, according to the sources.

The Japanese arm supported the online advertising business in Japan for the Singapore company, which was making profits through fees paid by advertisers around Asia.

As a reward, the Singaporean arm paid Google Japan amounts that covered the cost for such help and a certain rate of extra money.

The Tokyo Regional Taxation Bureau judged that the business mechanism allowed Google Japan to transfer part of its income to the Singaporean arm, the sources said.

The bureau decided that the Japanese arm’s reward should not be based on the business costs that it shouldered but on the actual advertisement fees obtained by the Singaporean arm.

It concluded that Google Japan failed to declare about 3.5 billion yen in income.