Japan National Tax Agency transfer pricing update – Update on audit procedures

Tax Insights ()

A recent revision to The Act on General Rules for National Taxes (“AGNT”) includes the introduction of a new chapter “7-2 Examinations of National Taxes” to clarify procedures to be taken during a tax examination. These procedures are effective for audits beginning on and after January 1, 2013. In connection with this revision, Japan's National Tax Agency has introduced a directive that addresses the coordination of general corporate tax audits and transfer pricing audits. Tax payers may now elect to either include or exclude transfer pricing matters in general corporate tax audits.