Archive for August, 2010

METI 2011 tax reform items

August 30, 2010  |  News, Policy  |  No Comments

Government policy

On 24 August 2010 the Japanese Ministry of Economics and Industry (METI) commented on their hoped for tax reforms of 2011.  This follows their consultation with industry bodies in July – schedule and documentation here (link in Japanese). Read More

Special relationship to an individual

August 30, 2010  |  basics  |  No Comments

Diagram of family relationship under the Japanese Civil Code

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

Taxation of mergers

Tale from a zen koan

For many years I was looking for the ox. I was so stupid! In fact I found a Cow! - A attractive photo-montage illustrating a Zen Koan

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

Joint venture formation and enterprise combination accounting

Criteria for a Japanese enterprise combination to be treated as a JV Formation

This article consists of a flowchart which applies the criteria used to determine whether or not an enterprise combination is treated as a JV Formation transaction under Japanese accounting standards.  The background to this treatment and the related standards is explained in this article. Read More

Japanese accounting for mergers and other enterprise combinations

A mendicant Buddhist outside Ueno station.

A mendicant Buddhist outside Ueno station.

This article discusses how mergers, takeovers and similar enterprise combinations are accounted for in Japan.
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

Mergers, corporate splits – outline diagrams

August 26, 2010  |  Business combinations  |  No Comments

Japanese corporate split

This article consists of three diagrams illustrating three classes of Japanese corporate reorganisation transactions, Mergers, Triangular Mergers and Corporate Splits. Read More

Financial Tax Review Committee considers Japan IRA Account.

August 23, 2010  |  News, Policy  |  No Comments

Government policy

The Financial Tax Review Committee (FTRC) (link in Japanese), one of the tax committees within the Japanese Ministry of Finance, commenced reviewing the feasibility of introducing a Japanese Individual Retirement Account (‘Japan IRA’) at their meeting of 29 July 2010. Read More

Thin capitalisation – diagrams

Thin capitalisation in Japan

This article consists of three diagrams which illustrate how the Japanese thin capitalisation regulations are applied. The first diagram illustrates the most straightforward application of the rules, the second illustrates the impact of a parent company guarantee Read More

2010 tax reform and deemed dividends

2010 tax reform and dividends

This article outlines an anti-avoidance measure included in the 2010 tax reform that prevents a shareholder applying the Japanese Dividends Received Deduction (‘DRD’) on a Deemed Dividend arising on the purchase by a company of its own shares. Read More

Tax controversy – Denso’s Singapore subsidiary a CFC

News, information

The Asahi Newspaper reported in July 2010 that Denso, the largest automotive parts manufacturer in Japan and part of the Toyota group, had received direction during its last tax audit that the company had under-reported JPY11.4Bn Read More