Japan’s National Tax Agency has released an explanation of its administrative guidance related to the Income Inclusion Rule (J-IIR), part of the country’s 2023 tax reform measures to implement Pillar Two global minimum tax.
The J-IIR ensures multinational enterprises, with a global revenue exceeding EUR 750 million, pay a minimum tax rate. This explanation clarifies how companies should handle specific aspects like contributions, tax calculations, and transitional measures.
The J-IIR is based on international models established by the OECD/G20 Inclusive Framework on BEPS (Base Erosion and Profit Shifting). While the initial rules were set in 2023, Japan made amendments in 2024 to reflect further guidance from the OECD.
