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Key Takeaways from the 2022 Amendments to Japan’s Transfer Pricing Administrative Guidelines: Loans and Debt Guarantees (Part 1 of 2)

February 7, 2023
  1. Introduction

In June 2022, the National Tax Administration Agency (NTA) announced amendments to the Transfer Pricing Administration Guidelines. The amendments are thought to reflect the January 2022 update to the OECD Transfer Pricing Guidelines on financial transactions, and they revise Japan’s legislation on the treatment of financial transactions and cost contribution agreements (CCA). It should be noted that this may affect Japanese companies operating outside of Japan, including those operating in the United States.

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One Point Advice on Transfer Pricing Taxation

April 19, 2022

Transfer pricing is a taxation to set appropriate prices for cross-border transactions with foreign related parties based on the “arm’s-length principle” and to require appropriate tax payment in each country. For example, a transaction in which a U.S. subsidiary purchases a product developed and manufactured by a Japanese parent company and sells it in the U.S. market occurs between related parties. Because of this, the price for this transaction can be arbitrarily determined. In this case, if the sales price from the Japanese parent company to the U.S. subsidiary is too low, the income attributable to this transaction will be transferred from the Japanese parent company to the U.S. subsidiary, resulting in an understatement of taxable income reported in Japan and, conversely, an overstatement of taxable income reported in the United States. Since the income reported in Japan will be understated, if this problem is pointed out during a tax audit, the Japanese Tax Authority will reassess the income based on the correct price and impose additional tax payments, resulting in a double taxation.

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Year-End Tax Planning Under A Biden Presidency

March 25, 2021


November 20, 2020

Although vote counting continues and legal challenges to the election endure, many news media organizations are projecting that former Vice President Joe Biden will become the 46th President of the United States on January 20, 2021.

The House of Representatives will remain under Democratic control, but control of the Senate is somewhat less certain since the balance of power will be determined in January 2021 following a run-off election for two open Senate seats in Georgia. The run-off is necessary because neither of the candidates in either of the races obtained more than 50% of the total vote count as required by the state’s election law. A win by the two Democratic candidates would shift the balance of power in the Senate from one of GOP control to one where neither party has a majority. In that case, if all Senators vote along party lines (including independent senators who typically vote with Democrats), any deadlock on legislation would be broken by Vice President-elect Harris casting the deciding vote. This tiebreaking potential would also determine the Senate leadership, the ratio of committee memberships between the parties, and the leadership of each committee.

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HLS US state taxes practical guide

U.S. State Taxes – A Practical Guide for Businesses Entering the United States

March 24, 2021

Companies from around the world sell their products and services into the U.S. market, either directly or through a US subsidiary. These businesses are continually looking for better ways to understand the tax and overall business climate. Many companies investing in the US need to better understand Federal as well as state income taxes. Each state is able to apply its own different tax rules and regulation to businesses that have a taxable presence within their jurisdiction.

This article will highlight the differences between federal and state taxes in the United States.

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US Corporate Taxes: What to Look Out for When Entering the US Market

August 18, 2020


The United States is still one of the largest recipients of foreign direct investment and remains an attractive location for foreign businesses. A large amount of this investment comes from places like Japan, Canada, Australia, and the European Union.

One of the main reasons attracting investment is that it is home to the world’s largest economy. Excellent infrastructure; legal protection for corporations; a productive and skilled workforce; and lucrative consumer markets across several sectors make it an attractive place to do business.

Having said that, the US is also known for its highly complex tax system. With extensive tax regulations, all businesses that operate in the US will be subject to its tax laws. As a Japanese outbound business or an entity growing your presence in the US, you will need to navigate your way through sometimes vague and confusing tax requirements on a national, state, and local level.

To help you avoid some common pitfalls when it comes to US corporate taxation, we’ve outlined some of the major considerations that all businesses operating in the US should make, whether you’re simply operating a representative office or establishing a fully owned subsidiary of the parent company.

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Amended US Japan Tax Treaty (Japanese Text Only)

November 21, 2019

2019年7月17日に日米租税条約の改正議定書が米国上院でついに承認され、8月6日に大統領が署名しました。今後、批准書の交換をもってこの議定書は効力を生じます。

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International Taxation Seminar (Japanese Text Only)

November 7, 2019

この度、2019年9月27日（東京）と10月30日（カリフォルニア）にて、米国に子会社を有する日本企業様、あるいは今後米国への進出を検討する日本企業様を対象に、税理士法人HLSグローバルとHotta Liesenberg Saito LLP の主催による「国際税務セミナー」を開催いたしました。当日は、日・米の国際税務の専門家が、「タックスヘイブン税制に係る令和元年度改正」、「移転価格文書化導入後の移転価格調査」及び「米中貿易摩擦についての関税及び移転価格対策」について解説しました。

 

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