Transfer pricing audits in Japan are conducted separately from the general corporate tax audits, by a specialized transfer pricing audit team within the tax authority .The 2011 revision of the tax system in Japan included changes and clarifications on the tax audit procedure including formal notification to the taxpayer in advance of the audit of the tax items to be included within the scope of the audit. At the conclusion of the audit the taxpayer would be issued an assessment or notified in writing if no assessment is to be made.
The OECD Committee on Fiscal Affairs is chaired by a representative from Japan, and the Japanese government strongly supports the action on base erosion and profit shifting (BEPS) taken by the OECD. As not many Japanese companies have been engaged in the type of aggressive tax schemes which the BEPS initiative is trying to address it is assumed that the impact of BEPS on corporate tax strategies would be limited.
