China Joint Venture Costs Honda $244 million

Three of Japan's automakers, Honda Motor, Mitsubishi Motors and Mazda Motor are selling more cars, but making less profit doing so.

Honda Motor Co's saw their profits dropped a whopping 86% in the first quarter of this year compared to last year.

The main reason – a corporate tax was levied on its Chinese joint venture of $244 million.

The Tokyo Regional Tax Bureau = think Japan's IRS – demanded more money from

Honda because according to the bean counters Honda hadn't been taxed enough for its Chinese JV over the past five years, ending in March 2006.

Honda says they paid their dues in China and have been abiding by the law.

Japan's IRS says, 'we want more and we are going to get it.'

They got it. 

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