The Japanese tax rules related to the taxation of corporate reorganisations (discussed here) can be applied, with some modification and additional considerations, to transactions involving foreign companies.
The following article gives an example of their application to a relatively simple transaction, the incorporation of a foreign branch of a Japanese company.
The Japanese Corporate Law (‘JCL’) includes measures allowing creditors or shareholders of the Ceasing or Surviving Companies in a Japanese merger to object to the merger along with mechanisms allowing the companies involved to resolve such objections. This article describes these measures in more detail.
Procedures for the protection of creditors
Under JCL articles 789-2 and 799-2 the Ceasing and Surviving Companies of a merger are required to Read More
This article outlines the steps required to complete a Japanese absorptive merger involving one company (below the ‘Surviving Company’) taking over the assets and liabilities of a liquidating company (below the ‘Ceasing Company’ and collectively with the Surviving Company the ‘Companies’) under a process defined by the Japanese Corporate Law (the ‘JCL’).
A Japanese merger involves two or more companies becoming one company further to a defined process in the Japanese Corporate Law (below the ‘JCL’). This article outlines legal aspects of the merger process as background for more detailed analysis of the Japanese tax treatment of mergers and other corporate reorganizations. Read More
This case concerns a Japanese company which claimed a deductible impairment loss on shares in a recently acquired US subsidiary which it had re-capitalized. The facts of the case reflect what is probably a relatively common commercial situation. Read More
The Japanese Civil Code (‘CC’) defines the Japanese partnership form, the Nin’I Kumiai. Not to be confused with the Tokumei Kumiai defined under the Japanese commercial code, the legal form of the Nin’I Kumiai is more similar to a conventional US or UK partnership.
A common transaction in a group reorganization is the contribution by a company of assets other than monetary assets in exchange for shares in another company. Such a transaction would typically occur in an incorporation transaction or perhaps in the process of consolidating subsidiaries under a single parent company. Read More
This article is an outline of the taxation of Japanese corporate reorganizations, focusing on mergers and looking at the key criteria that will determine how Ceasing KK in the merger will be taxed.
Please also see this article for diagrams with an outline of Japanese merger transactions and this article with an overview of the accounting treatment of Japanese enterprise combinations.
This article Read More
The articles looks at which accounting standards apply, the different categories of enterprise combinations defined in those standards and finally how purchase accounting Read More