JAPAN Law and Practice Contributed by: Yutaka Shimoo, Anderson Mōri & Tomotsune
if the evaded tax amount exceeds JPY10 million, the fine may be more than JPY10 million, but less than the evaded tax amount. 6.3 Interaction Between Tax and Criminal Procedures In the case of tax fraud or tax evasion, a criminal investigation group from the regional tax bureau inves - tigates the taxpayer and files a criminal complaint to the prosecutor. Based on this criminal complaint, the prosecutor decides whether to prosecute the tax - payer, and the judge renders judgement under the relevant criminal provisions. Parallel to any criminal procedure, unless the taxpayer voluntarily files an amended tax return and pays the amount due, the NTA will issue a disposition to deter - mine the tax amount to be paid by the taxpayer. 7. Administrative Co-Operation 7.1 Legal Framework for Administrative Co- Operation Many tax treaties executed by the NTA have relevant provisions with regard to administrative co-operation, including regarding the exchange of information and co-operation with the tax collection authorities. In addition, based on the OECD’s Base Erosion and Profit Shifting (BEPS) project, the NTA has jurisdic - tion over the administration of the Multilateral Instru - ment (MLI) to implement tax treaty measures related to preventing BEPS, which will come into effect on 1 January 2029. 7.2 Exchange of Information Clauses in Tax Agreements By an automatic exchange mechanism, the NTA exchanges: • the financial account information collected accord - ing to the Common Reporting Standard (CRS); • information on Country-by-Country Reporting (CbCR) based on the BEPS project; and • information collected by statutory reports.
In addition, the NTA provides foreign tax authorities with information about taxpayers, either voluntarily or at the request of foreign tax authorities. Furthermore, under the Crypto-Asset Reporting Framework (CARF), the NTA started collecting infor - mation on crypto-transactions at the beginning of 2026 and will exchange this information with foreign tax authorities. 7.3 Other Forms of International Tax Collaboration The NTA has joined the OECD’s International Compli - ance Assurance Programme (ICAP). 8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis According to the applicable tax treaty, the NTA will execute a mutual agreement procedure (MAP) if a tax - payer who is deemed to be a dual resident is taxed in a way that is inconsistent with the provisions of a tax treaty, in order to mitigate double taxation or adjust - ment of transfer pricing. 8.2 Application Deadlines A taxpayer is generally required to submit a MAP request within three years of the first disposition. However, the actual deadline differs according to the applicable tax treaty. 8.3 Mandatory Binding Arbitration Under many tax treaties executed by the NTA, manda - tory binding arbitration is generally available if a MAP ends in failure. 9. Dispute Prevention 9.1 Advance Pricing Agreements In Japan, three types of advance pricing agreement (APA) are available: • unilateral APA (an APA only with the Japanese tax authorities);
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