Tax laws

‘Demon Slayer’ studio accuses working conditions of violating tax laws

by Keane Eacobellis

Following the conviction of the president of animation studio Ufotable, Hikaru Kondo, earlier this month, the Japanese news site Daily Shinchō detailed the statements of the company founder as to why he committed a crime. tax evasion.

“We always end up in the red,” Kondo said of the studio’s work on popular projects. Since its inception in 2000, Ufotable has worked on hit shows like Fate / Zero, God Eater and, more recently, the hit adaptation of Demon Slayer: Kimetsu no Yaiba.

Crunchyroll first reported Kondo’s statements in English:

If our works are not successful… we will not be able to pay the salaries of our staff or recover the costs of production. I wanted to set aside enough money so that I wouldn’t have to worry about working capital in case something happened.

In an industry that relies on self-employment, avoiding the costs of health care and other benefits and the stability of a salary, Kondo has decided to make as much of his staff as possible full-time. Besides the labor costs, he said, according to the Daily Shinchō report, “the base production costs have gradually increased, but that does not mean that the money coming from the customer side has changed. “.

The period in which Kondo broke tax law was somewhat ironically followed by the record-breaking box office success of Demon Slayer: Kimetsu no Yaiba – The Movie: Mugen Train.

“The quality demanded from cartoons keeps increasing,” Kondo said, “but because the production costs offered by customers are relatively low, every time we produce a work, we always end up in the red.”

Kondo’s sentence – 20 months in prison – has been suspended for three years, according to Anime News Network reports on the case. Kondo could avoid serving a sentence, depending on his behavior for the period. He was convicted (and admitted) of violating corporate tax law and consumption tax law, withholding income from goods and coffee from 2015 to 2018, according to another article. of the ANN. The exact amount withheld and owed has varied in the reports, although Anime News Network reports that the Tokyo District Court’s preliminary hearing in September cited 138 million yen in unpaid taxes.