JAPAN Law and Practice Contributed by: Yutaka Shimoo, Anderson Mōri & Tomotsune
9.2 Other Mechanisms Under Japanese tax practice, with regard to interna - tional tax matters, a taxpayer can generally confirm a tax position by either: • a written response to an advanced tax query; or • a consultation with the relevant tax department/ office regarding the specific transaction. In addition, if the taxpayer is a large enterprise under the jurisdiction of the Special Examiner in the First Large Enterprise Examination Group of the Tokyo Regional Tax Bureau, such taxpayer can confirm their tax position through the Compliance Assurance Pro - gramme of Japan (“J-CAP regime”). In these programmes, responses given or comments made by the NTA are not legally binding. However, as these comments have a de facto binding effect on the NTA unless the underlying facts differ from those submitted by the taxpayer, many taxpayers apply for participation in these programmes.
• bilateral APA (an APA with a MAP between two jurisdictions); and • multilateral APA (an APA with a MAP among three or more jurisdictions). A unilateral APA is based on the Commissioner’s Directive on the Operation of Transfer Pricing. On the other hand, the other two types are based on the applicable tax treaties. According to the announcement on APA statistics, during the period from 1 July 2024 to 30 June 2025, the NTA accepted 280 MAP requests and 194 of these requests were regarding an APA. The announcement also stated that an APA takes an average of 42.4 months until settlement.
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