Japan Takes Hard-Line Stance Against Taxpayers’ Use of Amount B

The Japanese government made it clear this week that taxpayers may not use the Amount B simplified transfer pricing method part of the OECD global tax deal, even if the country on the other side of the deal is a qualifying low-capacity jurisdiction that has adopted it.

The Japanese tax authorities in FAQs posted Thursday said that taxpayers must continue to rely on conventional transfer pricing methods.

“Since Japan has not implemented the simplified and streamlined approach, it is necessary to request advance confirmation using the conventional methods for calculating the arm’s length price,” ...