Japan - New reporting requirements for share and company performance based compensation introduced

Global Watch ()

Under the 2012 Tax Reform, new reporting requirements were introduced for resident employees or directors of a Japanese subsidiary or Japanese branch of a foreign company who receive certain share or company performance based compensation. Specifically, new reporting requirements apply if such compensation is pursuant to rights granted by agreement with a foreign parent company. Share and company performance based compensation includes, for example, stock options, restricted stock, restricted units, employee stock ownership plans, phantom stock, share appreciation rights, performance shares and performance units, and other company performance based compensation. The amendment is effective for compensation received on or after January 1, 2012.