Friday, 15 January 2016

Japan 2016 tax reform revises transfer pricing documentation requirements

On December 24, 2015, the Japanese Cabinet approved the 2016 tax reform proposal (2016 Tax Reform), which includes revisions to Japanese transfer pricing (TP) documentation requirements. The revisions are based on recommendations in the "Transfer Pricing Documentation and Country-by Country Reporting, Action 13 2015 Final Report" (Action 13 Report) published on October 5, 2015 as part of the BEPS Project carried out by OECD and G20.
Under the reform, the preparation and filing of a Master File and a Country-by-Country Report (CbC Report) principally will be required of the ultimate parent company of a multinational enterprise (MNE). The new rules also will require the contemporaneous preparation of a Local File by all taxpayers that meet a transaction threshold. The contents of the Local File are those set out in Article 22-10 (1) of the Ordinance for Enforcement of the Act on Special Measures Concerning Taxation of Japan (the ASMT Ministerial Order), which will be changed slightly for some clarifications and the addition of some reportable items by the reform.
Source & more info: PwC