Posts Tagged ‘group transactions’

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

Related parties for transfer pricing purposes

August 13, 2010  |  Group Taxation, Transfer Pricing  |  No Comments

Foreign related parties - capital relationship

This article outlines the definition of Special Relationship and Foreign Related Party (‘FRP’) for Japanese transfer pricing purposes and includes diagrams giving examples of the application of the definition.  Transactions with an FRP with whom a Japanese company has a Special Relationship are subject to Japanese transfer pricing regulations and must be carried out at arms’ length to avoid tax adjustment. Read More

Japan 2010 tax reform – deferral of tax on intra group transactions

June 22, 2010  |  basics, Business combinations  |  No Comments

Pine trees are typically planted at the gate to large shrines.

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