What are the cases that result in an order to return subsidies?
Updated: July 2026, 1
Regarding the issue of North Safari Sapporo, a private zoo in Minami Ward, Sapporo, being opened in an urbanization control area without the necessary permits, the operating company, Success Tourism, is considering filing a lawsuit to seek the cancellation of the government order to return subsidies, according to an interview with the company's lawyer on the 20th.
According to the Organization for Small & Medium Enterprises and Regional Innovation, which is under the jurisdiction of the Ministry of Economy, Trade and Industry, it decided to grant the company 60 million yen in "business restructuring subsidies" in February 2023. However, after the problem was discovered, it revoked the decision on July 23rd and issued a notice ordering the company to return the 60 million yen subsidy.
According to the lawyer representing Success Tourism, "The company used the subsidy to set up the trailer homes for accommodation, but it has not violated the law and is therefore not obligated to return them." We will also provide support for online applications and post-application corrections.
What are subsidies?
Subsidies are a system in which, if certain requirements are met, an application is submitted to the relevant government ministry, local government, organization, etc. (hereinafter referred to as the "provider"), and if the application is approved after review, the grantee can receive the subsidy. Subsidies are provided to realize policies promoted by the grantor, and have a variety of purposes, such as introducing equipment that increases productivity or is environmentally friendly, revitalizing specific industries, supporting companies that promote teleworking, and strengthening the management base of small and medium-sized enterprises.
Why does the subsidy have to be returned?
principle,Once you receive the grant, you do not need to pay it back.However, in some cases, you may be asked to submit documents or progress reports on your project even after receiving the grant. The grant provider may also request an on-site inspection. If you do not respond to such requests or do not comply with the terms and conditions set out at the time of receiving the grant, you may be required to return part or all of the grant.
In fact, the "Act on the Proper Execution of Budgets Related to Subsidies, etc." states the following:
- Subsidies must not be used for other purposes or violate the conditions of receipt (Article 17)
・Property acquired through subsidies must not be transferred, exchanged, loaned, or used as collateral without approval.
(Article 22)
Failure to use the equipment for the purposes stated in the documents submitted when applying for the subsidy means that the grantor will not be able to achieve the purpose of the subsidy. If a follow-up report or investigation reveals that the equipment is being used for purposes other than those originally intended, the grantor will be ordered to return the subsidy. Furthermore, if a grant is received for capital investment to improve productivity and the equipment is then sold, exchanged, or rented out, this will also be deemed to be a failure to achieve the purpose of the subsidy.
Specific examples of when a return obligation arises
If you check the application guidelines for each subsidy, you may find that the reasons for repayment are listed individually.
・IT introduction subsidy
This subsidy is intended to help companies improve their business efficiency and increase sales by partially covering the cost of introducing IT tools.
If you cancel the IT tool you have introduced within one year, you may be subject to cancellation of the issuance and an order to return it.
In addition, if salary payments or minimum wage targets are not met, you may be asked to repay the money.
・Small business sustainability subsidy
This subsidy is intended to support efforts to develop sales channels and improve productivity in order to solve the various management challenges faced by small businesses.
If you make a false application, receive the benefit fraudulently, use expenses for purposes other than those intended, or dispose of assets without authorization, you may be subject to cancellation of the grant and an order to return the benefit.
<Others>
・Duplicate recipients
If you have received other subsidies, grants, etc. from the government (including independent administrative institutions) for the same content as this subsidized project.
・Information leakage
If there is suspicion of fraud, information leakage, or other inappropriate conduct as a subsidized business operator during the project period or after the grant has been granted.
・Insubstantial services
If eligible expenses have not been introduced, services have not been provided, or the subsidized project has not been implemented
・Impersonation
When actions that should be performed by the subsidized business operator themselves (such as opening an application page and subsequent procedures for grant application) are performed by someone other than the subsidized business operator.
・Kickback
If the sales method reduces or waives the subsidized business's share of the sales amount of eligible expenses (effectively returning the funds to the subsidized business, regardless of the format or timing), or if the business engages in an act that distributes unfair profits to certain interested parties.
Example: Reduce the purchase price of IT tools by issuing and using points, coupons, etc. (including those that can be exchanged for cash).
By setting the price as free or no price, the amount stated on the voucher proving the purchase price does not match the amount actually paid.
Case
・By refunding the applicant an amount equivalent to part or all of the purchase price of the IT tool by bank transfer or cash.
If the amount stated on the document proving the purchase amount does not match the amount actually paid
Measures and cases in the event of fraudulent receipt of benefits
If fraudulent receipt of subsidies is discovered, penalties will be imposed.
・Return of subsidies
・Additional charges for subsidy repayment
・Imprisonment
·fine
・Announcement of company name
・Criminal complaint
- Suspension of receipt of other subsidies
In addition to being required to return the subsidies or pay additional fees, details of the fraudulent receipt and the company's name will be made public on the website of the relevant ministry.
Additionally, according to the "Act on the Proper Execution of Budgets Related to Subsidies, etc.", you may be subject to a maximum of five years in prison or a fine of up to 5 million yen, or both. Furthermore, if you receive subsidies fraudulently with the intention of deceiving the donor, you may be subject to criminal prosecution. Depending on the importance of the content, it is quite possible that your social credibility may be damaged, with the matter being reported in newspapers and other media.
Summary
Subsidies do not need to be repaid as long as they are received in accordance with the rules, so they should be used effectively for your company's management.
On the other hand, if fraudulent receipt of subsidies or violation of regulations is discovered, not only will the subsidies have to be returned, but there is also the risk that criminal penalties such as imprisonment or fines will be imposed, and the company's name will be made public, leading to a loss of social credibility.
This is not only done intentionally, but often conflicts occur without the person even realizing it.
Therefore, it will be important to be conscious of compliance and work with experts to utilize subsidies in the future.
At Support Administrative Scrivener Corporation, we carefully select staff members who possess highly specialized knowledge and experience.
If you are a business owner who is worried about committing fraud due to a lack of knowledge, or if you are unsure about applying on your own because you don't know how to do it, please feel free to contact us.
