In recent years, tax authorities have been encouraging taxpayers to improve their tax compliance measures in recent years. Such areas include the development of a multinational company. As group’s management system, their managements understanding of transfer pricing taxation and the potential issues that arises. A transfer pricing documentation prepared by an outside expert may satisfy these requirements, however the documentation alone may not satisfy the tax authorities.
Further to preparing a transfer pricing documentation, it is important to establish a comprehensive transfer pricing policy and adopt such policies beginning with management of the employees.
Tax compliance support
Corporate tax audits consist of reviewing appendix 17 (4) of the corporate tax return (association with related companies), treatment of salaries for expatriates, the licensing of intangible property and provision of services based on a transfer pricing taxation perspective.
We offer support for the aforementioned areas as well as developing an internal policy for the group and preparing relevant documents. Further, we are able to host seminars to educate your company on transfer pricing taxation matters.
Transfer pricing risk assessment
In order to prevent transfer pricing risks from occurring, the following risk measures should be considered.
・Make an assessment of the Group’s risks during the early stages of international business.
・Selecting the significant subsidiaries with the highest risk from a transfer pricing taxation perspective.
・After the transfer pricing documentation is prepares, evaluate the transfer pricing risk for the rest of the subsidiaries.
・Re-evaluate the reasonableness of documentations that have already been prepared (second opinion).
Transfer pricing documentation
Offer two methods for the preparation of transfer pricing documentation.
・Full preparation: We will solely prepare the transfer pricing documentation.
・Hybrid: We will collectively prepare the transfer pricing documentation with the client.
Further, there are cases where a transfer pricing documentation is prepared based on the foreign parent company’s requests. In such cases, we will prepare the documentation by taking into consideration the parent company’s requests, the group’s transfer pricing policy and Japan’s transfer pricing taxation risks.
Defensive support for transfer pricing tax audit
Japan Tax authorities
We will support and act as a mediator between your company and the Japan tax authorities during transfer pricing tax audits.
Foreign tax authority (Foreign subsidiary)
Our worldwide network enables us to offer support in different countries during a transfer pricing tax audit with a foreign tax authority. We also offer our advice to the Japan parent company for why questions raised by local tax authorities while taking into consideration the entire group’s transfer pricing risks.
Mutual agreement support
Advance Pricing Agreements(APAs) support
APAs is an agreement entered between a multinational company and the tax authorities stating the method and prices the company will apply. This begins with a preliminary consolidation for the preparation of the APAs application to the submission and due diligence under the APAs process.
Mutual Agreement Procedure (MAP)
We offer the preparation and submission of a mutual agreement request when the tax assessment is not in accordance with the taxpayer’s transfer pricing policy or “OECD Guidelines”.