Japan-US APA relationship - a fresh look

Tax Controversy & Dispute Resolution ()

On March 26, 2013, the Internal Revenue Service (IRS) of the United States (US) issued its 14th Annual Statutory Report on Advance Pricing Agreements (APAs). The most interesting point of the report from the Japanese perspective is that 53% of bilateral APAs executed by the IRS in 2012 involved Japan as a counterparty (or 55 bilateral APAs in absolute numbers). Although the report is in its fourteenth year, this is the first time that data by counterparty jurisdiction have been released and suggest that, despite the growth in US trade with other countries in recent years, particularly China, the Japan/ US trade relationship still appears to be the most significant from the US tax perspective. But what does this relationship look like from the Japan side?