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Tax News Letter Japan Tax Bulletin 2024 2023 2021 2022
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Navigating UTPR in Japan: Inbound Businesses in Focus
JAPAN TAX BULLETIN Navigating UTPR in Japan: Inbound Businesses in Focus
Pillar Two presents a complex web of rules, Income Inclusion Rule (IIR), Qualified Domestic Minimum Top-up Tax (QDMTT), and the Undertaxed Profits Rules (UTPR), formerly known as the Undertaxed Payments Rule. Multinational enterprises (MNEs) operating in Japan will need to understand the interaction of each rule enacted under Japan's domestic legislation.
10 min read | 2025/06/23
Business Travel to Japan - Understanding the 183-day rule for income tax treaties
JAPAN TAX BULLETIN Business Travel to Japan - Understanding the 183-day rule for income tax treaties
With the COVID-19 travel restrictions lifted, business travel has increased significantly. Some companies assume their employees are tax-exempt if their home country has an income tax treaty with the host country and the employee spends not more than 183 days in aggregate there.How to count the days can easily create confusion. This edition of the tax bulletin explains how to count 183 days and pitfalls you need to be aware of when counting travel days to Japan.
9 min read | 2025/06/16
Global Minimum Tax Rules: Key Updates and Implications
JAPAN TAX BULLETIN Global Minimum Tax Rules: Key Updates and Implications
The global tax landscape is experiencing a historic transformation as countries implement the OECD/G20’s Pillar Two framework—an initiative designed to introduce a Global Minimum Tax (GMT) of 15% on large multinational enterprises (MNEs). Japan has taken a proactive role in adopting and legislating this framework, aligning its domestic laws with the OECD’s model rules while tailoring certain elements to suit its national tax policy objectives. This article provides an overview of the Income Inclusion Rule (IIR), Undertaxed Profits Rule (UTPR), and Qualified Domestic Minimum Top-up Tax (QDMTT) as implemented in Japan, highlights key dates, compares Japan’s approach with OECD recommendations, and explains the rules’ impact on Japanese corporations.
6 min read | 2025/04/15
Trending articles
JAPAN TAX BULLETIN Business Travel to Japan - Understanding the 183-day rule for income tax treaties
9 min read | 2025/06/16
JAPAN TAX BULLETIN 2025 Fiscal Year (Reiwa 7) Tax Reforms – Corporate Tax
7 min read | 2025/02/26
JAPAN TAX BULLETIN Reform of tax credit for salary increase
11 min read | 2024/12/23
International Inheritance Tax Holding taxes - Investing in Japan real estate from overseas
3 min read | 2025/02/25
Our Insights
Navigating UTPR in Japan: Inbound Businesses in Focus
JAPAN TAX BULLETIN Navigating UTPR in Japan: Inbound Businesses in Focus
Pillar Two presents a complex web of rules, Income Inclusion Rule (IIR), Qualified Domestic Minimum Top-up Tax (QDMTT), and the Undertaxed Profits Rules (UTPR), formerly known as the Undertaxed Payments Rule. Multinational enterprises (MNEs) operating in Japan will need to understand the interaction of each rule enacted under Japan's domestic legislation.
10 min read | 2025/06/23
Business Travel to Japan - Understanding the 183-day rule for income tax treaties
JAPAN TAX BULLETIN Business Travel to Japan - Understanding the 183-day rule for income tax treaties
With the COVID-19 travel restrictions lifted, business travel has increased significantly. Some companies assume their employees are tax-exempt if their home country has an income tax treaty with the host country and the employee spends not more than 183 days in aggregate there.How to count the days can easily create confusion. This edition of the tax bulletin explains how to count 183 days and pitfalls you need to be aware of when counting travel days to Japan.
9 min read | 2025/06/16
Global Minimum Tax Rules: Key Updates and Implications
JAPAN TAX BULLETIN Global Minimum Tax Rules: Key Updates and Implications
The global tax landscape is experiencing a historic transformation as countries implement the OECD/G20’s Pillar Two framework—an initiative designed to introduce a Global Minimum Tax (GMT) of 15% on large multinational enterprises (MNEs). Japan has taken a proactive role in adopting and legislating this framework, aligning its domestic laws with the OECD’s model rules while tailoring certain elements to suit its national tax policy objectives. This article provides an overview of the Income Inclusion Rule (IIR), Undertaxed Profits Rule (UTPR), and Qualified Domestic Minimum Top-up Tax (QDMTT) as implemented in Japan, highlights key dates, compares Japan’s approach with OECD recommendations, and explains the rules’ impact on Japanese corporations.
6 min read | 2025/04/15
The inexorable rise of AI in TP benchmarking, and how Japanese company reporting paves an easier path for it
JAPAN TAX BULLETIN The inexorable rise of AI in TP benchmarking, and how Japanese company reporting paves an easier path for it
The quality of AI outputs is improving with a pace too significant for it to be discounted. The oft repeated phrase is that AI and automation is ideal for tasks that are repetitive, follow a specific set of rules, and take a long period of time with manual input. For example, current AI can assimilate information from a Local File and use this to evaluate the comparability of comparable companies based on their business description and other information, providing acceptance and rejection reasons accordingly.
12 min read | 2025/04/03
2025 Fiscal Year (Reiwa 7) Tax Reforms – Corporate Tax
JAPAN TAX BULLETIN 2025 Fiscal Year (Reiwa 7) Tax Reforms – Corporate Tax
The 2025 fiscal year, known as Reiwa 7 in Japan, brings several changes to the corporate tax landscape. These reforms aim to enhance corporate competitiveness, encourage investment, and ensure fair taxation. This bulletin outlines the key aspects of the Reiwa 7 corporate tax reforms, based on the latest publications by the Japan Ministry of Finance.
7 min read | 2025/02/26
Holding taxes - Investing in Japan real estate from overseas
International Inheritance Tax Holding taxes - Investing in Japan real estate from overseas
Foreign investors looking to invest in Japan real estate have various options on how to hold the investment.
3 min read | 2025/02/25
Diversifying into Japan real estate for a non-resident
International Inheritance Tax Diversifying into Japan real estate for a non-resident
Foreign investors looking to invest in Japan real estate have various options on how to hold the investment.
2 min read | 2025/02/18
Clarifications on Foreign Tax Credit Documentation: Detailed Overview
JAPAN TAX BULLETIN Clarifications on Foreign Tax Credit Documentation: Detailed Overview
In December 2024, The Japan National Tax Agency (NTA) has recently issued an update correction to Form of Statement Concerning Foreign Tax Credit for an individual resident taxpayer for 2022 calendar year and thereafter. This correction is concerning foreign income taxes on distribution of collective investment trust income.
6 min read | 2025/01/29
Reform of tax credit for salary increase
JAPAN TAX BULLETIN Reform of tax credit for salary increase
Under the 2024 tax reform, the Japanese government strengthened tax credit for salary increase from the perspective of (a) easing the burden on citizens whose wage increases have not kept pace with rising prices, (b) aiming to achieve an economy where wage increases that fully exceed price increases are sustained and (c) supporting efforts to balance work and child-caring and promote the advancement of women. The main points of the revision are the establishment of a new definition called “medium-sized enterprises” and the raising of the tax credit ratio through the establishment of additional deductions for childcare support and the promotion of women's activities.
11 min read | 2024/12/23
Doing business in Japan
Doing business in Japan Doing business in Japan
If you are planning on doing business in Japan, knowledge of the investment environment and information on legal, accounting, taxation and human resource frameworks are essential to keeping you on the right track. This guide has been prepared for the assistance of those interested in doing business in Japan. It does not cover the subject exhaustively but is intended to answer some of the important, broad questions that may arise. When specific problems occur in practice, it will often be necessary to refer to the laws and regulations of Japan and to obtain appropriate accounting and legal advice. This guide contains only brief notes and includes legislation in force as of November 27, 2024.
Less than a minute | 2024/11/27
Entertainment expenses
JAPAN TAX BULLETIN Entertainment expenses
The deductibility of entertainment expenses under Japan corporate tax law is a complicated topic. This newsletter explains the deductibility of entertainment expenses in general and also in relation to the special sub-category of entertainment expenses for meals and drinks.
8 min read | 2024/11/26
Focusing on SME Growth Through Enhanced Investment Loss Reserve System
JAPAN TAX BULLETIN Focusing on SME Growth Through Enhanced Investment Loss Reserve System
Japan's commitment to invigorating its small and medium-sized enterprises (SMEs) took a significant step forward with the announcement of the 2024 fiscal year tax reforms. These reforms, part of the Reiwa 6 year plan, focus on expanding the SME Business Reorganization Investment Loss Reserve System. This policy is tailored to empower SMEs to grow through strategic acquisitions and integrations.
2 min read | 2024/10/21
Tax Reform on Determining Taxable Enterprise Under Consumption Tax Law
JAPAN TAX BULLETIN Tax Reform on Determining Taxable Enterprise Under Consumption Tax Law
This article explains the impact of the reform of determining a taxable enterprise for consumption tax purposes on foreign owned domestic enterprise and a foreign enterprise for taxable periods beginning after October 2024, based on the amendments.
1 min read | 2024/09/25
Tax reform on the sized-based business taxation
JAPAN TAX BULLETIN Tax reform on the sized-based business taxation
The size-based business taxation system was introduced in 2004. The size-based business taxation system imposes “a value-added tax” and “a capital-based tax” on companies with stated capital of more than JPY100 million. The taxes are levied even where a corporation is in currently loss position. A value-added tax is levied based on the sum of the distribution of earnings (comprising remuneration and salaries, net interest paid and net rent paid) and profit or loss for a single year, and a capital tax is levied based on the amount of stated capital, capital reserve, other capital surplus etc. as defined by the Corporation Tax Law.
1 min read | 2024/08/07
Pillar One Amount B released by OECD
JAPAN TAX BULLETIN Pillar One Amount B released by OECD
On February 19, 2024, the Organization for Economic Cooperation and Development (OECD) published its final report on Pillar 1 Amount B to simplify and streamline the application of the arm's length principle to baseline marketing and sales activities, with a focus on the needs of countries or regions with low tax enforcement capacity.
1 min read | 2024/07/24
Hometown Tax Donation (Furusato Nozei)
JAPAN TAX BULLETIN Hometown Tax Donation (Furusato Nozei)
Hometown Tax donation (Furusato Nozei) is a system that allows individuals to receive income tax and inhabitant tax deductions for donations made to local governments of their choice. In addition, since the donor can receive return gifts from the recipient local government, the number and amount of such donations have been increasing in recent years attracting more and more attention. This article explains how it works and how the tax amount is reduced.
1 min read | 2024/06/27
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