Japan’s National Tax Agency (NTA) has issued Frequently Asked Questions (FAQs) regarding transfer pricing (TP) documentation requirements in Japan. It addresses those questions that are likely to be of most interest to overseas headquartered Multinational enterprises with a Japanese subsidiary or branch. A key concern is a clarification on when the tax authorities may apply presumptive taxation (The tax authorities have the right to presume a transfer price and to reassess the taxable income accordingly) and use examinations of companies in the same industry (i.e., secret comparable) to estimate the amount of tax to be paid. This clarification may pointer a greater intent by the Japanese tax authorities to make use of those measures.s.
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