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A wide range of services based on sophisticated knowledge and experience
Recent changes to the economy and our society have made tax laws increasingly complex, and it has become more difficult to interpret those laws without help of highly qualified professionals. At the same time, an increasing need for tax compliance has also made it more important for companies to collect and prepare relevant materials in a timely and appropriate manner and to analyse tax laws in light of future tax audits and tax disputes at the early stages of a transaction. PwC Legal Japan’s specialised tax lawyer team has a high level of expertise and a strong track record in this area.
To meet our clients’ management needs regarding tax compliance, our tax lawyers provide advice at each stage of the transaction , including pre- and post-transaction stages. We analyse the legal status of the transaction under the private laws (e.g. civil laws, corporate laws and foreign laws) that serve as the basis of the transaction, and conduct a detailed analysis of tax laws (including the interpretation of tax denial provisions) based on an analysis of court precedents, academic theories and practical treatments. Based on such analyses, we provide the necessary support to enable our clients to build appropriate transaction structures from tax and legal perspectives and take appropriate measures in preparation for tax audits and tax litigation that may occur after the transaction.
The following services can help you structure your transactions in the most effective way from both tax and legal perspectives:
- Analysis and advice on the most appropriate transaction structures for a wide variety of transactions (M&A, establishment of joint ventures, finance transactions, executive compensation and incentive plans, inheritance, business succession etc.) from both tax and legal perspectives
- Preparation and review of M&A-related contracts (share purchase agreements (SPAs) etc.) and other contracts requiring special tax-related knowledge
- Support for tax risk management via advice that takes into account future tax audits and tax disputes regarding the following:
- Structuring transactions
- Preparation of contracts and other relevant documents
- Preparation of position papers to support the taxpayer's position.
- Support for prior consultation with tax authorities regarding tax treatment of transactions
We provide the following legal advice and consultation services on issues regarding the interpretation of tax laws:
- Legal analysis and advice on issues regarding the interpretation of the following tax laws
- Corporate tax, income tax, consumption tax, inheritance tax, gift tax, local tax and other relevant taxes
- International taxation issues such as controlled foreign corporation (CFC) taxation rules and transfer pricing taxation
- M&A taxation
- Tax treatment of executive compensation and incentive plans
- Applicability of anti-tax avoidance rules
- Preparation of legal opinions and memorandums related to the interpretation of tax laws
- Review of various contracts from both tax and legal perspectives
- Support for prior consultation with tax authorities in relation to issues regarding the interpretation of tax laws
Our experienced and accomplished tax lawyers provide the following support for dealing with the tax authorities during tax audits:
- Preparation of theories and strategies for the taxpayer’s argument and counterargument
- Preparation of position papers and other relevant documents
- Advice on filing documents and evidence with the tax authorities
- Tax audit observation and negotiation with the tax authorities as an attorney of the taxpayer
- Preparation of legal opinions
- Other support for the handling of tax audits
With a strong track record of experience in the field, our tax lawyers provide comprehensive support for strategy planning, preparation of allegations and evidence, and other procedural and non-procedural support related to tax disputes:
- Strategy planning for tax disputes
- Consultation and advice on strategic policies for the taxpayer’s allegations and evidence
- Consultation and advice on tax dispute procedures
- Representation of taxpayers in administrative appeals
- Representation of taxpayers in tax lawsuits
- Preparation of legal opinions
- Second opinions regarding to tax disputes
- Other procedural and non-procedural support related to tax disputes
Past examples
Effective defence for a tax audit (preparation of objections and legal opinions)
For a client who disagreed with the national tax authority’s view regarding their tax audit, we collaborated with PwC Tax Japan to prepare and submit objections and legal opinions, which were effective in convincing the tax authority to accepted the client’s position.
Preparation for future tax audits (investigation of the facts, establishment of legal positions and preparation of legal opinions)
For clients engaged in significant transactions both inside and outside Japan, we investigated the relevant facts and prepared tax position papers and legal opinions with regard to various tax regimes (e.g. the corporate reorganisation tax regime, group tax regime, CFC rules, calculation of deemed dividend and capital gains and losses, donation tax regime, withholding and anti-tax avoidance rules) in order to provide reasonable claims from both factual and legal perspectives in preparation for the possibility of future tax audits.
In some cases, for clients who consulted in advance with the national tax authority, we also prepared and submitted explanatory materials and legal opinions to the national tax authority. As a result, the tax authority accepted the clients’ positions.
Analysis and advice on the application of Japanese tax law to overseas transactions (by leveraging the PwC global network)
For a Japanese corporation with many foreign subsidiaries that was examining the Japanese tax consequences (e.g. deemed dividends, capital gains/losses and applications of CFC rules) in relation to a restructuring that included mergers and de-mergers of their foreign subsidiaries, we leveraged the PwC global network to investigate the legal nature (legal effect and treatment) of foreign mergers, de-mergers and entities under the relevant local laws, and prepared tax position papers and legal opinions regarding the applicability of Japanese tax law to such foreign transactions (including entity classification).
Structuring and review of share purchase agreements for M&A
- For clients engaged in significant M&A transactions, we collaborated with PwC Tax Japan to provide advice on efficient structuring from both tax and legal perspectives.
- For clients selling or acquiring significant businesses through M&A transactions, we collaborated with PwC Tax Japan to review the share purchase agreements from a tax perspective, and provided the clients with advice to help them avoid bearing an unreasonable tax burden or assuming risks arising from the target businesses or M&A transactions.
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Our team
Michito Kitamura
Partner, PwC Legal Japan
Hiroki Yamada
Partner, PwC Legal Japan
Kozo Kuromatsu
Director, PwC Legal Japan
