Dbriefs Podcasts

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2025 Tax Reform: Pillar Two (UTPR and QDMTT)

With the 2025 tax reform proposals, Japan is set to introduce both the Undertaxed Profits Rule (UTPR) and the Qualified Domestic Minimum Top-Up Tax (QDMTT), building on the existing Income Inclusion Rule (IIR) to align with the OECD’s Pillar Two global minimum tax framework.

In this episode of The Japan Perspective, Brian Douglas and Yu Inagaki break down the key implications of the UTPR and QDMTT and discuss how multinational companies operating in Japan can prepare for these new rules and filing requirements.

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

If you've recently listened to our podcast and would like to share your thoughts or feedback, we would greatly appreciate it. Your feedback helps us improve and tailor our content to our listeners. Please share your feedback via this link

Navigating the Global Trade Environment

With global trade policies evolving rapidly, businesses worldwide must navigate new trade measures and tariffs that could impact their operations. 

In this episode of The Japan Perspective, Takuma Yamamoto discusses recent developments in global trade and customs, sharing his insights on how multinational companies in Japan can stay ahead of regulatory changes and mitigate potential trade risks using Trade Compass , a web-based tool that helps companies optimize trade agreements like FTAs and make informed strategic decisions. 

To learn more about DT GTA & Technologies Co., Ltd’s service offerings, please visit https://www2.deloitte.com/jp/en/pages/about-deloitte/articles/tax/dtgtat.html

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

If you've recently listened to our podcast and would like to share your thoughts or feedback, we would greatly appreciate it. Your feedback helps us improve and tailor our content to our listeners. Please share your feedback via this link

2025 Tax Reform Proposals

The 2025 tax reform includes various proposals to put more cash into he hands of consumers and encourage consumers to invest their savings. On the corporate side, the reform proposes to increase the corporate tax rate by almost a full percentage point to fund Japan’s plan to strengthen its self defense capabilities. If enacted, this increase, along with changes to accounting for operating leases, will require companies to update their tax accounting calculations. Also, the proposals show Japan’s determination to implement all aspects of the OECD’s global minimum tax (or Pillar 2) initiative with the introduction of the Qualified Domestic Minimum Top-up Tax and the Under Taxed Profits Rule.

In this episode of The Japan Perspective, Brian Douglas, managing director, walks through some of the key provisions of the tax reform proposal impacting foreign multinationals.

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

If you've recently listened to our podcast and would like to share your thoughts or feedback, we would greatly appreciate it. Your feedback helps us improve and tailor our content to our listeners. Please share your feedback via this link

Customs audits: What to expect and when

Based on data released by the Japanese Customs Authority (JCA) in November 2024, over 3,500 Japanese importers were audited in the most recent administrative year to 30 June 2024, with over JPY 6 billion of penalties and interest imposed.

In this episode of The Japan Perspective, Naoyuki Kano, managing director, discusses some of the key trends relating to audits by the JCA, and what a business importing goods into Japan can expect if they receive notification of an upcoming audit.

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

If you've recently listened to our podcast and would like to share your thoughts or feedback, we would greatly appreciate it. Your feedback helps us improve and tailor our content to our listeners. Please share your feedback via this link

Optimizing tax operations—evolving challenges require innovative solutions

Foreign multinational enterprises operating in Japan must react to a number of issues that make it increasingly challenging to deliver tax operations internally in an effective and cost-efficient manner.

A shrinking talent pool of qualified personnel is exacerbated by the need for bilingual practitioners who are equipped to work in international business environments. In addition, rapid technological advances and a constantly evolving regulatory landscape require significant investment, putting pressure on companies to allocate additional resources to information technology, and employee training.

These challenges are leading companies to re-evaluate traditional approaches to managing tax functions and to seek out more sustainable and efficient solutions. They need to ensure they have access to the right expertise, technology, and resources to navigate this complex landscape effectively.

In this episode of The Japan Perspective, David Bickle, partner in Deloitte Japan’s Business Tax Services group, discusses some of these challenges for companies operating in Japan. In particular, the Tax Operate model, and the cost and efficiency considerations confronting CFOs and tax directors responsible for procuring the capability to deliver tax operations in the current business climate.

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

If you've recently listened to our podcast and would like to share your thoughts or feedback, we would greatly appreciate it. Your feedback helps us improve and tailor our content to our listeners. Please share your feedback via this link

Navigating the Japanese incentives landscape 

The Japanese government has earmarked foreign direct investment as critical for economic growth, announcing a goal of JPY 100 trillion of foreign direct investment by 2030, and offering incentives and subsidies to foreign companies at both the national and local level.

Designated specific areas for strategic support include tax incentives and subsidies related to investments in carbon neutrality, large-scale investments in certain regional areas by small and medium-sized enterprises, and investments related to innovation. Although some of these tax incentives and subsidies to encourage investment have been available for a number of years, the utilization rate among foreign companies generally has been low. 

In this episode of The Japan Perspective, Masaaki Miura, partner in Deloitte Japan’s Gi3 (Global Investment and Innovation Incentives) group, discusses the grants and incentives landscape in Japan, Deloitte Japan’s Incentive Insights tool, and some options for foreign companies looking to benefit from the available incentives.

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

If you've recently listened to our podcast and would like to share your thoughts
or feedback, we would greatly appreciate it. Your feedback helps us improve and tailor our content to our listeners. Please share your feedback via this link

Recent changes to the consumption tax rules affecting foreign companies

As part of Japan’s 2024 tax reform, several measures were introduced to the Japanese consumption tax (JCT) regime that are designed to tighten the rules around the prescribed tests to determine whether an entity is a JCT payer or a JCT exempt enterprise. In addition, changes were made that require certain foreign companies without a permanent establishment in Japan to calculate their JCT liability based on actual input and output tax amounts, rather than on the simplified taxation system or small to medium-sized business exemption. The new measures apply to tax periods beginning on or after 1 October 2024.

In this episode of The Japan Perspective, Nicole Baxter, a director in the indirect tax group at Deloitte Japan, discusses these recent changes to the JCT rules and how they affect foreign companies doing business in Japan.

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

If you've recently listened to our podcast and would like to share your thoughts
or feedback, we would greatly appreciate it. Your feedback helps us improve and tailor our content to our listeners. Please share your feedback via this link

Buyback of shares

Budget 2024 introduces significant changes to the taxation of share buybacks, shifting the tax burden from companies to shareholders. This amendment, effective 1 October 2024, impacts both domestic and cross-border buybacks. This podcast focuses on the tax implications of cross-border buybacks and explores key issues worth considering. Tune in to learn more.

Playing your best card: Navigating tax audits in Japan

The number of field audits in Japan has been increasing each year, and is now returning to the level seen prior to the COVID-19 pandemic (see our Tax Controversy Japan Update 2024). Foreign multinationals are therefore likely to face a tax audit in the near future (if not already), and while tax audits may result in disagreements between a company and the tax authorities, it could be in best interests of the company to try and resolve those differences during the course of the tax audit.

In this episode of The Japan Perspective, Yutaka Kitamura, Tax Controversy Leader, DT Legal Japan, provides an overview of a typical tax audit in Japan and discusses the options available to a taxpayer facing a potential tax assessment.

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

Pillar One - Amount B: Concepts and implications

As global tax regulations evolve, understanding and embracing the Two-Pillar solution by the OECD are pivotal for businesses aiming to enhance transparency, build trust, and drive sustainable growth.

Join our experts Mr. Anis Chakravarty, Asia Pacific Transfer Pricing Leader, Mr. Tarun Arora, India Transfer Pricing Leader and Ms. Karishma Phatarphekar, Transfer Pricing Partner at Deloitte India, as they unravel the complexities of the Amount B under Pillar One of the OECD guidelines.

Exploring Tax Transparency: Navigating Complexity, Fostering Trust

In the current landscape of heightened awareness around corporate governance and ethics, embracing tax transparency is a vital opportunity for growth and trust-building.

Join us as Riddhi Shah, Tax Partner at Deloitte India, and Prayag Kinariwala, Senior GM - Corporate Taxation at Lupin Limited delve into the significance of transparent tax reporting for businesses, governments, and society.

Tune in to uncover the nuances, challenges, and benefits of transparent tax practices in today's evolving landscape of governance and corporate responsibility. Don't miss out on this insightful conversation!

ESG and Transfer Pricing 

Environmental, social, and governance (ESG) initiatives are reshaping corporate landscapes, impacting reporting requirements and intersecting with tax and transfer pricing domains. Our latest podcast sheds light on the ripple effects of HQ-led ESG strategies, prompting revisions in intercompany pricing policies. Carbon credit procurement, green financing, ESG-focused KPI selection are some of the key transfer pricing areas affected by these initiatives. 

Join our experts Riddhi Shah, Tax Partner at Deloitte India, Mark Barker, Tax Director at Deloitte Australia, and Subhabrata Dasgupta, Tax Partner at Deloitte Malaysia, as they discuss the evolving dynamics of ESG within the Group's value chain and emphasize the crucial need for alignment with transfer pricing policies amidst tax technical and reputation risks. Don't miss this insightful conversation!

Revisions to the factor-based enterprise tax system

In the 2024 tax reform proposals, Japan's Ministry of Finance announced its intention to introduce changes to the current factor-based enterprise tax regime.

In this episode of The Japan Perspective, Deloitte Japan’s tax professionals Joanna Hazel and Ken Leong examine the recent reforms to the factor-based enterprise tax system. The discussion highlights the closure of certain loopholes in the current legislation and sheds light on the implications for Japanese subsidiaries of multinational enterprises who are faced with navigating these changes.

The Japan Perspective is Deloitte Japan’s podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

2024 tax reform series—proposed new and revised tax incentives

In the 2024 tax reform proposals, Japan's Ministry of Finance announced its intention to introduce two new tax incentives for strategic investment and innovation, and proposed amendments to the existing carbon neutrality incentive, as follows:

• Strategic investment: Aimed at encouraging corporate investment in digital transformation, green transformation, and economic security. The government has identified five key products crucial for Japan's global competitiveness.

• Innovation box: Targets intangible properties like patents and covers intellectual property transfers and license transactions, with certain limitations.

• Carbon neutrality: Would extend incentives for two more years, with revisions focused on direct contributions to improving a company's carbon productivity. Eligible assets would be refined to prioritize investments with a more direct impact on carbon neutrality.

In this episode of The Japan Perspective, Deloitte Japan's tax professionals Joanna Hazel and Masaaki Miura emphasize Japan's alignment with global trends, its commitment to aggressive carbon reduction goals, and the benefits for companies aligning their strategies with the evolving incentive landscape.

The Japan Perspective is Deloitte Japan’s podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

Preparing for changes to the taxation of online platforms

In the 2024 tax reform proposals, Japan's Ministry of Finance announced its intention to introduce changes to the taxation of online platforms as from 1 April 2025.

In this episode of The Japan Perspective, Deloitte's tax professionals Joanna Hazel and Nicole Baxter discuss the new tax and explore the significant changes set to take effect in 2025. The discussion offers an insight into the necessary compliance requirements and highlights the impact that the new tax will have on both platform operators and foreign digital service providers. 

The Japan Perspective is Deloitte Japan’s podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

2024 tax reform series - Introduction 

Japan’s ministry of finance announced in mid-December 2023 proposals for the 2024 tax reform, which include a range of domestic and international measures. 

In this episode of The Japan Perspective, which is the first in a series of episodes on the 2024 tax reform, Deloitte Japan’s tax professionals, Joanna Hazel and Brian Douglas, discuss the 2024 tax reform proposals that were announced by the government and break down the three main themes of the proposed reforms: bridging the gap between inflation and slow wage growth, encouraging companies to invest in Japan, and ensuring compliance. 

Specific discussions include changes to the local enterprise tax (addressing issues related to large companies and subsidiaries), proposals around Japanese consumption tax (including platform taxation), and new proposed incentives for strategic goods production and IP-related endeavors.

Please register for Deloitte Japan’s upcoming 15 February 2024 webcast discussing the 2024 tax reform proposals in more depth to stay ahead of the tax reform curve. 

The Japan Perspective is Deloitte Japan’s podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

Transfer Pricing Operate

The world is changing, and so are businesses. The new leaner business organisations look at factors, internal and external, for improving productivity and reducing work cycles and costs while doing so. These can be achieved by channelling resources in core business operations and outsourcing non-core processes such as TP compliance. TP Operate manages an organisation's end-to-end transfer pricing compliances to generate insights and achieve efficiencies in operations and costs. 

Watch our leaders, Jun Sawada, Partner, Tax, Deloitte Japan, Tarun Arora, Partner, Tax, Deloitte India, and Carlo Navarro, Partner, Tax, Deloitte Southeast Asia, share their views on TP Operate, elaborating on how it can assist in smarter decision-making, improving efficiencies, and driving operational readiness.

Key insights into the qualified invoice system

Japan has implemented a qualified invoice system (QIS) as from 1 October 2023, which imposes new documentation requirements on businesses operating in Japan. Failure to comply with the QIS rules may affect an entity’s ability to claim an input Japanese consumption tax (JCT) deduction.

In this episode of The Japan Perspective, host Joanna Hazel and guest Nicole Baxter, a senior manager in Deloitte Japan’s Indirect Tax group, discuss the effect of the QIS on businesses operating in Japan, providing valuable insights into the challenges faced by buyers and suppliers, and detailing the potential consequences of not holding valid qualified invoices under the new QIS rules. This episode also explores the range of preparation undertaken by affected businesses, from those with a full 12 months of review and planning, to others, particularly in the digital services sector, that are only now reviewing their supply chains.

The conversation then shifts to recent developments in online platform taxation in Japan. Nicole shares insights from a Ministry of Finance study group, which indicates that platform operators are likely to be responsible for collecting JCT on business-to-consumer sales of digital services made by foreign suppliers through online platforms. Other key points include deeming the platform operator as the seller and not imposing a sales threshold on the seller.
The podcast concludes with a brief update on changes to eligibility around claiming import JCT. Nicole explains a clarification issued in June 2023 as to the determination of the importer when there is no underlying import transaction and emphasizes the retroactive application of this clarification to open fiscal years.
The podcast offers valuable insights into these tax developments, ensuring businesses stay informed about the evolving Japanese indirect tax landscape. 
The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

Are you ready for the new Electronic Record Retention Law?

Amendments to Japan’s Electronic Record Retention Law (ERRL) making the digital storage (to prescribed standards) of electronic transaction records compulsory as from 1 January 2024 have implications for all businesses operating in Japan.

 In this episode of The Japan Perspective, David Bickle, partner in Deloitte Japan’s Business Tax Services team, discusses the updates to the ERRL and explains what the changes mean in practice. He emphasizes the importance of integrity and readability in stored data, and the risks of noncompliance. Taxpayers are advised to understand which documents fall within the ERRL definition of electronic transaction record and how these documents are stored in their current systems, to identify and remediate any gaps to ensure compliance before the deadline. 

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and their potential impact on foreign multinational companies operating in Japan.

Pillar Two—Mechanisms and effect on inbound businesses

The OECD’s Pillar Two imposes a global minimum tax, and its recent implementation in Japan will impact large foreign multinational companies in Japan in different ways depending on their global structure. In this episode of The Japan Perspective, Deloitte Tokyo’s tax professionals Joanna Hazel and Brian Douglas discuss the various mechanisms of Pillar Two and their impact on Inbound businesses’ tax considerations, as well as how to prepare for the implementation of the Income Inclusion Rule. They also discuss how businesses with subsidiaries in Japan can approach any potential future implementation of the other mechanisms of Pillar Two. 

The Japan Perspective is a podcast series committed to communicating the latest Japanese tax developments and the potential impact on foreign multinational companies operating in Japan.

APA/MAP developments and updates 

Are Advance Pricing Agreements (APAs) on the upswing? In recent months, the Central Board of Direct Taxes has released its fourth and fifth annual reports in quick succession on the APA programme, interestingly including information on Mutual Agreement Procedures (MAP).

Here is an engaging conversation between experts Sobhan Kar (Senior Advisor, Deloitte India) and Tarun Arora (Partner, Deloitte India), decoding these APA and MAP reports and sharing their valuable insights on the trends and what these reports indicate.

Recent increase in tax rates for royalties/FTS for foreign taxpayers 

The recent increase in taxation rates for royalties and fees for technical services or FTS earned by foreign companies from India—from 10% to 20%, which was not part of the original Finance Bill 2023, was introduced subsequently in the parliamentary amendments to the Bill. Quite a noteworthy change, this will impact several Indian companies borrowing technical expertise/know-how from foreign parent, affiliates, or other foreign suppliers at large.

Global remote work policy

There has been a paradigm shift when it comes to reimagining the workplace prompted by COVID-19. An employee-friendly measure that several global organisations are evaluating is a ‘Global – Work from Anywhere’ policy. This podcast gives you an overview of the reason this policy is reflective of a post COVID-19 ‘future of work’ and sums up the Indian tax implications to be borne in mind by employers and employees, with regards to employees opting to work out of India for the permitted duration.

Italian Incentives provided by the Italian Recovery Plan (PNNR)

The Italian recovery plan is being introduced with a goal of enhancing the Italian recovery after the crisis induced by the pandemic. Part of the measures introduced provide a wide range of tax credit to boost the transformation of the Italian industrial system by driving more and more investment in innovation, industry 4.0 asset, R&D expenses, design and digital transformation. Tax credit introduced are easy to be calculated and suitable to offset any type of tax liabilities, so that they can be considered cash grant equivalent . The new rules offers a number of benefits from a tax perspective and is an exciting development for companies that have invested or are investing in Italy. This podcast provides an update on the legislative process and a brief overview of the rules.

The UK Asset Holding Companies Regime

The new UK Asset Holding Companies (AHC) regime is being introduced as part of a wider review of the UK funds regime, with a goal of enhancing the UK's competitiveness as a location for asset management and for investment funds. The new regime offers a number of benefits from a tax perspective and is an exciting development for our clients operating in this space. This videocast provides an update on the legislative process and a brief overview of the rules.

Company Provided Housing Scheme in Japan

Company provided housing, if structured properly can provide tax benefits to employees. It is a popular employee benefit scheme that will help companies retain and attract the best talent in a competitive market. In this podcast, our Japan professionals will present the general conditions that should be met in structuring the company provided housing scheme and how Deloitte can help from a tax and legal perspective with the implementation of the plan or reviewing the existing programs.

Extra Territorial Taxation – Germany focused

A number of countries have introduced the taxation of royalties based only on the registration of intellectual property. The Asia Pacific based owner of IP may have tax obligations in Germany on royalties received from outside of Germany but where the underlying IP is registered in Germany. Hear what Claus Schuermann (Tax Partner, Deloitte APICE) has to share on the current developments in Germany.

Crypto tax in Australia

With the resurgence of Cryptocurrencies, there are an increasing number of traders, mining and companies worldwide using them for a host of investment, operational, as well as transactional purposes.In this episode, Neil Pereira (Tax Partner, Deloitte Australia) will speak to us about the current tax treatment of cryptocurrency gains in Australian context.