Japan has a very broad general tax anti-avoidance rule that can be applied to certain defined classes of company (referred to below as ‘Anti-Avoidance Rule Companies’ or ‘AAR Cos’). This is Article 132 of the Japanese Corporation Tax Law.
The scope of the companies to whom this rule can apply Read More
Recent years have seen a significant expansion in the types of trusts, partnerships and corporations that can be formed in Japan.
Understanding which entities are pass-through for tax purposes, which entities are taxed as corporations Read More
One seemingly trivial issue which can have great practical importance is obtaining proof that a Japanese company has paid its corporation tax liability.
Evidence of such tax payment is often critical for foreign tax credit purposes or for due diligence purposes. Below is an outline of the Japanese tax payment process with examples in English Read More
This article explains the definition of ‘Special Relationship’ (特殊の関係) for Japanese tax purposes as applied to individuals. This definition is used in different contexts in the Japanese tax law, for example as part of the process of determining whether or not a company is Family Company for Japanese tax purposes. Read More
The diagram to the right in this post outlines two group relationships defined for Japanese corporate tax purposes. These are the Japanese Consolidated Tax group, that allows offset of losses within the Japanese group, and the IGTS group, that allows the transfer if assets between Japanese corporate members of the group without giving rise to gain or loss. Read More
The Asahi Newspaper reported on 2 August 2010 that the major household electronics manufacturer Panasonic had been subject to an assessment for JPY22Bn Read More
When interpreting tax matters it is critical to have a proper understanding of the terms used in Japanese legislation, accounting standards or similar technical documents. In order to help users of the Japan Tax Site get such an understanding the Site has developed a searchable database (the ‘Tax Definitions Database‘) of translations and explanations of Japanese technical terms Read More
This post outlines the rules introduced in the Japanese 2010 tax reform that allow sales of certain assets to be made between defined Japanese entities within a group of wholly owned companies without immediately recognizing taxable gain or loss. This system is referred to in Japanese as the グループ内取引等に関する税制・guruupu nai torihiki tou ni kansuru zeisei, translated below as the ‘Intra Group Transactions Tax System’ abbreviated as IGTS. The system should apply to transactions from 1 October 2010 onwards but professional advice from qualified Japanese tax professionals must be taken to confirm how the system can be applied. Read More
This article has a selection of FAQs around basic Japanese corporate taxation together with links to more detailed articles for each topic discussed.
Please do not hesitate to add comments or further questions as these can form the basis of further FAQ items in due course.