PwC Financial Services Tax News 2009

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December Draft Proposed 2010 Japanese Tax Reforms: Impact on the Financial Services Industry [PDF 93KB]
On December 18, 2009, the Tax Commission (Zeisei Chosakai) released a draft of its proposed taxation reforms for the 2010 budget (Draft 2010 Tax Reform Proposal).  A finalized version of the 2010 Tax Reform Proposal is anticipated to be released within this year.  Following that release, it is anticipated that the Ministry of Finance will formalize a submission for the Cabinet’s approval, forming the basis for draft legislation to be considered by the Diet for approval and enactment from April 1, 2010.
November 2010 Tax Reform Change in tax reform process under the coalition government led by the Democratic Party of Japan [PDF 110KB]
As a result of the 45th general election of the House of Representatives held on August 30th, 2009, the Democratic Party of Japan (“DPJ”) gained 308 seats and won a single-party majority. Afterward, Yukio Hatoyama, the president of the DPJ, was designated as the 93rd Prime Minister of Japan.  In accordance with the policy summary of DPJ, “INDEX 2009”, DPJ changed the traditional tax reform process practice by the Liberal Democratic Party of Japan (“LDP”), and has formed a new Tax Commission, which consists solely of members of the Diet, headed by the Minister of Finance. The Tax Commission has started to deliberate the 2010 Tax Reform.

Special Edition Treatment of capital in Japan financial services transfer pricing [PDF 48KB]
Treatment of capital, or compensation for the role of capital, in transfer pricing in Japan has been a difficult issue in recent years, and one of the most common areas of disagreement between the tax authority and taxpayers. In the Tax Tribunal’s decision on July 2, 2008 in a case involving a Japanese branch of a foreign financial institution, we get a glimpse of the Japanese tax authority’s current thinking of the role of capital.
October 2009 Tax Reform on Taxation of covered warrant for individuals[PDF 91KB]
The 2009 Tax Reforms were promulgated on March 31, 2009, and the scope of special tax treatment applicable to certain futures trades was extended to certain listed covered warrants with effect from such listed covered warrants exercised or sold on or after January 1, 2010. Business income, miscellaneous income or capital gains from the exercise or sale of covered warrants listed on a Japanese financial instruments exchange are entitled to the special tax treatment for individual income tax purposes.
September Release of Guideline for applying PE determination and 25/5 Rule for foreign investment in certain partnerships[PDF 104KB]
  Special Edition Taxation of Sovereign Wealth Funds in Japan[PDF 88KB]
August ‘Fokus Bank'-reclaim of dividend withholding tax[PDF 92KB]
July 2009 Tax Reforms on Taxation of Discount Bonds[PDF 92KB]
  Special Edition New OECD report on building transparent tax compliance by banks[PDF 39KB]
Special Edition Islamic Finance[PDF 43KB]
June Release of Q&A on loss as arising from valuation of listed securities[PDF 93KB]
May 2009 Tax Reforms Special rules for Japanese Corporate tax on land acquisition[PDF 111KB]
April No.2 2009 Tax Reforms Requirements for dividend deductibility for J-REITs and TMKs[PDF 111KB]
No.1 2009 Japanese Tax Reforms approved - Changes to the application of the 25/5 Rule and PE determinations for foreign investment into certain partnerships[PDF 92KB]
March Abolition of Intermediate Corporations (Chukan Hojin) - Enforcement of the new General Corporations Law and the tax effects for a bankruptcy remote vehicle in the asset and liquidation business[PDF 91KB]
February Real Property Taxation - Extension of Reduced Tax Rates for Transfer Taxes[PDF 132KB]
January Release of Q&A regarding director’s remuneration[PDF 32KB]