Invoices indicated that goods shipped through this subsidiary received a major markup before being sent to other units of Swatch. For instance, Omega watches were given a 40 percent markup if they went out to Singapore and a 50 percent markup when bound for Japan. One company e-mail stated: ‘‘Externally for tax reasons we credit only 60 percent. That means that we have an internal credit note and different external credit note . . . The advantage of this procedure is that we have absolutely no negative impact on the internal [reporting] figures in Japan.’’
Tax lawyers interviewed about the matter said that to justify the mark-up differences as they pass through the subsidiary