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Strengthening international taxation in Japan

It will be five years in 2020 since the final report of the BEPS (Base Erosion and Profit Shifting) * project by the OECD was published in 2015.

Even before the BEPS project, international taxation was strengthened in Japan, and international taxation has been strengthened in all areas of personal income tax, corporation tax, and asset tax.

In the tax reform after the BEPS project, for example, the following tax reform has been made in relation to international taxation. In addition, many other international tax reforms have been made.

2016 Tax Reform	Requirement of master file and local file in transfer pricing taxation
2017 Tax Reform	・Revision of tax obligations such as inheritance tax on foreign property ・Revision of combined taxation of foreign subsidiaries
2018 Tax Reform	・Revision of tax obligations such as inheritance tax after departure of foreigners ・Revision of regulations related to permanent establishments
2019 Tax Reform	・ Revision of transfer pricing tax system based on BEPS project ・ Revision of excessive interest tax system

Increased speed and complexity of international taxation in Japan

Along with the recent structural change of global business model, foreign companies and multinational companies are actively attracting in Japan as well, while the strengthening of international taxation is increasing in speed and complexity.

Under these circumstances, this report provides practical information on doing business and taxation in Japan as a reference for foreign investors and foreign companies who are considering investing in or have invested in Japan.

We hope it will help you expand your business in Japan.

*BEPS（Base Erosion and Profit Shifting）
This is a project launched by the G20 / OECD in 2012 in order to cooperate with each other in coping with tax avoidance that takes advantage of differences in tax systems between countries by multinational companies, and was published as the final report in 2015. (Reference: National Tax Agency website)

20 April,2020

Shuji Niwa
Managing Partner, Tax
NihonKeiei Will Tax Corporation

This article makes general comments based on information available at the time of publication. Actual tax and management decisions need to be considered individually, so please consult a tax accountant or other expert before making any decisions. We cannot take any responsibility even if you make a decision based on this article and suffer damage directly or indirectly.