Local File
Outline
・Entity who has the duty of preparation：
Corporations engaged in Controlled Transactions
・Documents to be prepared：
Documents considered as necessary to calculate Arm's Length Prices (ALP)
・Start of application：
Business year that begins on April 1, 2017 or thereafter
Corporations engaged in Controlled Transactions
・Documents to be prepared：
Documents considered as necessary to calculate Arm's Length Prices (ALP)
・Start of application：
Business year that begins on April 1, 2017 or thereafter
・Deadline for preparation：Deadline for submission of final returns（Contemporaneous
documentation “CD”）*
*In the cases listed below, corporations are exempted from the duty of CD for Controlled
Transactions with one foreign-related party during the current business year.
(1) If the amount of transactions (total of receipts and payments) with the foreign-related party
during the previous business year was less than five billion yen, and
(2) If the amount of transactions of intangibles (total of receipts and payments) with the
foreign-related party during the previous business was less than 300 million yen
documentation “CD”）*
*In the cases listed below, corporations are exempted from the duty of CD for Controlled
Transactions with one foreign-related party during the current business year.
(1) If the amount of transactions (total of receipts and payments) with the foreign-related party
during the previous business year was less than five billion yen, and
(2) If the amount of transactions of intangibles (total of receipts and payments) with the
foreign-related party during the previous business was less than 300 million yen
・Deadline for submission：If transactions require CD By the day designated by the tax examiner
which comes within 45 days (As to documents considered as important to calculate ALP, within 60
days)
If transactions are exempted from CD By the day designated by the tax examiner which comes within 60 days
which comes within 45 days (As to documents considered as important to calculate ALP, within 60
days)
If transactions are exempted from CD By the day designated by the tax examiner which comes within 60 days
If Local File is not presented or submitted by a certain appointed date, the tax office can impose tax
by estimation and inspect corporations engaged in similar businesses by asking questions.
Since transfer pricing taxation can be traced back for 6 years, if there is a denied transaction,
additional taxes and penalties associated therewith may be enormous.
by estimation and inspect corporations engaged in similar businesses by asking questions.
Since transfer pricing taxation can be traced back for 6 years, if there is a denied transaction,
additional taxes and penalties associated therewith may be enormous.
AKIA Services
AKIA will provide support for preparation of Local File with the following steps.
1. When your group already has Master File or transfer pricing document (“TPD”) related to the
Control Transactions in the country of counterparty, please provide them to us. Since these
documents contain many contents that can be used in Local File, the cost of preparation can be
reduced.
2. We will provide your group a question and request list.
3. As necessary, we will advise on preparation for documents describing details of profits/losses in the Controlled Transactions.
4. Based on the above information, we will draft Local File.
1. When your group already has Master File or transfer pricing document (“TPD”) related to the
Control Transactions in the country of counterparty, please provide them to us. Since these
documents contain many contents that can be used in Local File, the cost of preparation can be
reduced.
2. We will provide your group a question and request list.
3. As necessary, we will advise on preparation for documents describing details of profits/losses in the Controlled Transactions.
4. Based on the above information, we will draft Local File.
| If there is a TPD prepared in the country of counterparty and it covers the items of Local File in Japan, it can be accepted to use the TPD as Local File on the Japanese side. However, since it is necessary to fully consider the contents, please consult us in advance. |
