Japan transfer pricing documentation rules | KPMG | BE

Japan: Guidance under new transfer pricing documentation rules

Japan transfer pricing documentation rules

Japan's national tax agency has released guidance concerning new transfer pricing documentation rules.


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The guidance (released 30 June 2016) includes certain reference materials—i.e., explanations, examples of required information, and examples of documents to be prepared—for taxpayers to follow as they comply with the transfer pricing documentation rules.

Under Japan's 2016 tax reform, amendments were made to the Japanese transfer pricing documentation rules. These changes are in line with the recommendations under Action 13, Transfer pricing documentation and country-by-country reporting, of the OECD's base erosion and profit shifting (BEPS) project. 

The Japanese rules provide a  three-tiered approach—country-by-country (CbC) reports, Master files and Local files—for certain "specified" multinational enterprise (MNE) groups (i.e., those whose total consolidated revenue is JPY100 billion or more).

Local files are subject to contemporaneous documentation, and the items to be provided in the Local files have been revised. Also taxpayer companies are to maintain Local files if engaged in transactions with foreign related parties, even if the company does not belong to a "specified" MNE group satisfying the JPY100 billion threshold.


Read a July 2016 report [PDF 116 KB] prepared by the KPMG member firm in Japan

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