Japan’s Corporate Tax Regime ‘Unpredictability’ Raises Hackles

Japanese multinationals are gathering data on overseas subsidiaries to flag which parts of their operations are ensnared in the country’s controlled foreign corporation regime.

The exact tax impact of the regime won’t be clear until after companies file tax returns on behalf of their subsidiaries in 2020. But already, the potential scope has companies concerned.

The regime defines a controlled foreign corporation as a foreign company in which 50 percent or more is owned by Japanese companies, Japanese resident individuals, non-related individuals or de facto CFCs.

The rules apply to 11 kinds of passive income, ...