{"id":3677,"date":"2020-06-15T07:02:26","date_gmt":"2020-06-14T22:02:26","guid":{"rendered":"https:\/\/hls-global.jp\/?p=3677"},"modified":"2021-04-23T00:01:38","modified_gmt":"2021-04-23T00:01:38","slug":"why-comprehensive-tax-advisory-might-be-essential-for-your-business","status":"publish","type":"post","link":"https:\/\/hls-global.jp\/en\/2020\/06\/15\/why-comprehensive-tax-advisory-might-be-essential-for-your-business\/","title":{"rendered":"Why Comprehensive Tax Advisory Might be Essential for Your Business"},"content":{"rendered":"

Over the last decade, Japan has introduced various measures to combat perceived tax avoidance by multinational enterprises. Putting the activities of global corporations under increased scrutiny, it has become imperative for businesses operating in Japan to apply a sufficient amount of precaution and due diligence to all things tax-related<\/strong>.<\/p>\n

As well as this, the global tax landscape continues to evolve, with each nation updating its own policies to be aligned with current trade and foreign policies. Should entities fail to navigate both the obligations of their home countries and Japan\u2019s complex tax requirements, the consequences can be severe.<\/p>\n

All this is to say that having a comprehensive tax advisory to support your expansion or Japan market entry<\/a> activities is essential. We explore this topic and how to find your own tax advisory.<\/p>\n

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Learn More About Our Tax Services<\/a><\/strong><\/p>\n

What Do Tax Advisors Do?<\/h2>\n

Tax advisors offer a wide range of services that cover the various aspects related to tax compliances, including support for the preparation and filing of relevant tax documents<\/strong>. As well as actually helping you to gather information and compile important documentation to track your activities and prove that your organization is tax compliant, they will also help you to plan for future tax activities, helping you to streamline the process and avoid or minimize any tax penalties.<\/p>\n

This kind of strategic support is where professional tax advisory can truly help multinational companies confidently operate in Japan, whether they are doing business in Japan for the first time or expanding their current operations through an existing subsidiary in Japan. Below are some specific activities tax advisors can help your business with.<\/p>\n

Tax Accounting<\/h3>\n

A huge amount of information must be recorded and assessed as part of the yearly tax accounting process. While each company’s earnings, expenditure, expenses, and profit allocation to partners and shareholders must be tracked, large multinational businesses will be subject to additional tax scrutiny for many other processes and activities<\/strong> that take place as part of standard operations. This can include any exchange of funds externally or internally through intracompany transactions.<\/p>\n

This extra layer of complexity is best handled through regular tax accounting support, rather than isolated periods of tax preparation. As many important transactions, agreements or exchanges can take place at infrequent periods throughout the year, it is common that larger organizations have constant tax accounting support<\/strong> to record the process diligently and make tax preparations accordingly.<\/p>\n

Companies embarking on a Japan market entry<\/a> venture also find that this kind of ongoing support is best paired with additional business and logistical support from a partner in Japan, to help overcome the inherent challenges of operating in a new market. This can include Japanese market research, localization support, and business consulting<\/a>.<\/p>\n

It is common that larger organizations have constant tax accounting support to record the process diligently and make tax preparations accordingly.<\/em><\/p>\n

\"Company<\/a><\/p>\n

Japan was one of the first countries to implement advance pricing agreements (APAs) to cover transfer pricing<\/a>. It now has one of the most developed transfer pricing landscapes where tax authorities are well-trained at monitoring transfer pricing activities and standards<\/strong> across the growing number of multinational corporations operating here in Japan.<\/p>\n

As such, businesses who are entering the Japanese market for the first time or have been here for many years are equally expected to comply fully with the nation\u2019s transfer pricing policy. This applies to global companies with annual consolidated revenue exceeding 100 billion yen, however, it is prudent for entities below this threshold to still calculate acceptable intercompany pricing within Japanese regulations.<\/p>\n

A tax advisor will not only help you to comply with relevant regulations, but they can also help to establish a company-wide transfer pricing policy to inform relevant group companies how to comply with transfer pricing regulations in Japan<\/strong>. Some additional services offered by tax advisors for transfer pricing include:<\/p>\n