Our Transfer Pricing Support
We could provide Transfer Pricing Documentation Support and APA Preparation Support. Of course we could also provide annual trasfer pricing documentation filing service, managing your tax risks and promoting tax compliance. When we provide transer pricing support, especially on the documentation, we advise tax risk management as a tax corporate governance.
Transfer Pricing on BEPS project
Globalisation has benefited our domestic economies ith the free movement of capital and labor, the shift of manufacturing bases from high-cost to low-cost locations, the gradual removal of trade barriers, technological and telecommunication developments, and the ever-increasing importance of managing risks and of developing, protecting and exploiting intellectual property. As the economy became more globally integrated, so did corporations.
Globalization has resulted in a shift from country-specific operating models to global models based on matrix management organizations and integrated supply chains that centralize several functions at a regional or global level.
According to the final report of the Organisation for Economic Co-operation and Development (OECD), this is a background where multi-national enterprises now represent a large proportion of global GDP and international standards need to realign the allocation of taxing rights on cross-border income to ensure the coherence of corporate income taxation at the international level.
In order to meet this new tax environment, multi-national enterprises have to establish new tax risk management and compliance by preparing and filing new transfer pricing documents.
Specific in Japan
Transfer pricing rules have been adopted by many other countries, based on the agreed international standard developed by OECD, as the OECD’s final report was published in October 2015. Accordingly, these rules are almost common to countries.
However, practical regulations are set in each tax jurisdictions. Therefore, if your multi-national enterprise group has a Japan subsidiary, you have to figure out Japan transfer pricing regulation and the difference between rules at the country where your ultimate parent entity locates and Japan, and have to determine which documents are prepared and how they are prepared by the Japan subsidiary itself.
Where the difference could be
Country by Country Report (CbC Report) and a Master file are new adopted in Japan on this BEPS project Act 13. Accordingly all business entities and also permanent establishments basically have filing obligation of transfer pricing documents including a CbC Report and a Master file.
A local file has been already filed in Japan. A Local file is changed to achieve the coherence of corporate income taxation at the international level base on BEPS Act 13.
Therefore, you have to prepare a Master file and a Local file with figuring out every information filled in the form of a new Local file in Japan. Practically Japan subsidiary has to find which information is covered by the ultimate parent entity and what documentations are filed by the ultimate parent entity.
Key point on Transfer Pricing Documentation
According to BEPS project, many tax administrations exchange the master file automatically with foreign country's tax administrations. Therefore, there should be consistent with each information prepared by constituents entities at each tax jurisdiction. That makes the prices between constituent entities of multi national enterprise group adequate.
Therefore, a Japan subsidiary has to establish the process to check the consistency of the information provided by an ultimate parent enterprise together with preparing its local file and CbC Report by itself.
Please contact us to ask a quote and our advice
You could grasp your hurdles by discussing with us.
Shirokane CPA Firm Could
Japan subsidiary do not have to build up the new process to collect necessary information to prepare the CbC Report and the local file, if needed, because Japan subsidiary usually use a global accounting system of the multi national enterprise. This seems to make a Japan subsidiary easily to prepare and to file transfer pricing documents. Shirokane CPA Firm could also understand and use your global system to support transfer Pricing documentation.
Moreover, if you hope to manage Japan tax risk adequately, you have to understand Japan tax regulations especially on transfer pricing, and also assess the documents prepared by the Japan subsidiary compared with the multi national enterprise group information.
Shirokane CPA Firm could consult on this kind of risk assessment with providing the service of preparing and filing transfer pricing documents. Then our deep insight and broad knowledge could support high quality.
Besides, Shirokane CPA Firm works on your transfer pricing documentation as a project composing a right team for each client with trusted qualified professionals. This could make us propose you reasonable fee compared with big accounting and audit firms with large fixed asset and indirect service personnel.