Tax - Japan

Overview

The Tax Group is an integral part of our Japanese Business Team, providing midsize and the largest Japanese companies and high-net-worth individuals with ties to the United States tailored tax advice and representation before tax authorities. We work seamlessly with our corporate, intellectual property, and litigation teams to provide you holistic advice and partner with other law firms, accounting firms, and experts to assemble the best team for your needs.

A major part of our work is in transfer pricing—the largest international tax risk facing multinational companies. We make sure that our Japan-based clients do not suffer double taxation because of conflicts between the transfer pricing rules of Japan and the United States. In many cases, we secure bilateral advance pricing agreements from Japanese and U.S. tax authorities that set forth agreed transfer pricing methods to mitigate tax risk and provide certainty in an increasingly complex world. In other cases, we represent companies in challenging and defending against proposed adjustments by the Internal Revenue Service to reduce or eliminate income adjustments and avoid double taxation. We use both domestic procedures and the procedures provided in the income tax treaty between Japan and the United States.

Organized into seven practice areas—Federal Income Tax, International Tax, Employee Benefits & Executive Compensation, State & Local Tax, ERISA Litigation, Exempt Organizations, and Wealth Planning—we advise companies in a wide array of industries, both domestic and international. Our advice ranges from developing tax-efficient strategies for acquisitions, reorganizations, and divestures to bridging differences in tax and customs valuation rules and from structuring financial transactions in various currencies to dealing with the property taxes imposed by local governments.

Our Japanese-based tax clients thrive in the automotive, e-commerce, electronics, heavy equipment, and pharmaceutical industries. Other Japanese clients include trading companies and companies investing in U.S. real estate, distributing consumer products, and serving as distributors to or suppliers of major manufacturers.

Experience

• Advised a U.S. subsidiary of a Japanese purchaser on U.S. tax issues in the $10.4 billion acquisition of a Dutch corporation.
• Advised a Japanese seller on U.S. tax issues in the structure of the sale of a controlling interest in a $5 billion U.S. corporation to a Canadian purchaser.
• Obtained and renewed advance pricing agreements between the tax authorities of Japan and the United States (and, in some cases, additional countries as well) for several of the 10 largest Japanese corporations. These agreements have provided each of these companies transfer pricing protection for over 10 years and, in some cases, nearly 20 years.
• Advised Japanese pharmaceutical companies on U.S. tax issues, including those arising from collaboration agreements, the deductibility of research expenses, taxable permanent establishments, and related matters.
• Reached agreements with the relevant tax and customs authorities to mitigate risks associated with differences in computing the value of imported products for income tax deductions and declared values for customs.
• Advised Japanese companies on U.S. tax issues associated with joint ventures and other collaborations.
• Structured U.S.-Japan intercompany transactions to mitigate costs associated with increased tariffs.
• Advised a foreign-parented company and its U.S. subsidiary on a favorable ruling from the Internal Revenue Service on the interaction of transfer pricing and customs valuation approaches under I.R.C. Sections 482 and 1059A, respectively. (PLR 202552012)