Japan: Delaware limited partnership, treated as corporation

US limited partnership, treated as corporation in Japan

A decision of the Japanese Supreme Court concludes that a limited partnership formed under the laws of the U.S. state of Delaware is to be treated as a corporation for Japanese tax purposes. The long-awaited Supreme Court decision resolves a split among the district courts and high courts in Tokyo, Osaka, and Nagoya.

Related content

The Supreme Court set forth the following criteria for determining whether a foreign entity is to be treated as a corporation for Japanese tax purposes:

  • Determine whether it is clear beyond doubt, that the legal status equivalent to that of a Japanese corporation is granted to the foreign entity under the laws of the country where it was established, considering the provisions of such laws and the legal framework
  • In situations when this cannot be demonstrated beyond doubt, then determine whether the foreign entity is an entity that assumes rights and obligations on its own account (i.e., whether the foreign entity itself can be a party to legal actions and whether the legal effects of the actions are attributable to such foreign entity)

Based on these criteria, the Supreme Court concluded that a Delaware limited partnership is to be treated as a corporation for Japanese tax purposes.


Read an August 2015 report [PDF 126 KB] prepared by the KPMG member firm in Japan: US (Delaware) LPS – Japanese Supreme Court Decision 

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG's new digital platform