Dbriefs Podcasts

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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.