The Yomiuri Shimbun daily, quoting sources connected with the police investigation, said a drunken Smith was arrested after refusing to pay a roughly 10,000 yen ($90.23) taxi bill and fleeing, then punching the taxi driver who chased him multiple times shortly after midnight on Dec. 31.
Smith, 37, had denied the allegations, the Yomiuri added.
Local police were not immediately available for comment but Suntory Holdings Ltd confirmed his arrest in a statement.
"It is true that George Smith, under contract to our rugby team, has been arrested," the company said.
"We issue a heartfelt apology to the victim, as well as other related people, as well as to the many people who have worried and been caused problems by this."
Flanker Smith made his professional debut in 2000 with the ACT Brumbies and since retiring from international rugby in 2010 has played in France, England and Japan. Her returned to Super Rugby in Australia last season for a stint with Queensland Reds.
(Reporting by Elaine Lies; Editing by Peter Rutherford)
