Tokyo Electron hopes MAP will resolve dispute over transfer pricing adjustment

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Tokyo Electron hopes MAP will resolve dispute over transfer pricing adjustment

Tokyo Electron (TEL), a Japanese electrical manufacturer, will contest a transfer pricing adjustment from the Japanese tax authorities relating to transactions with subsidiaries in the US and South Korea.

tokyoelectron150.gif

The Tokyo Regional Taxation Board said the income allocated to the parent company was insufficient for the six years, ending fiscal year March 31 2011, and has corrected this income to ¥14.3 billion ($180 million) with penalty taxes of ¥6.7 billion.

The company maintains its taxes were correctly paid and says, it emphasised this during an audit from the authorities, but neither side was able to come to an agreement.

“It is truly regrettable that the situation has developed to the point that TEL is subject to a retrospective tax adjustment, and that TEL cannot acquiesce to the adjustment,” said a TEL company statement. “TEL will promptly file its objections with the tax authorities and perform procedures requesting inter-governmental consultations pursuant to the tax treaties ratified by Japan, the United States, and South Korea.”

The company seems confident it will be able to resolve the issue through consultations with the Competent Authorities of the three countries involved and plans to report for the first quarter of the fiscal year up to March 31 2013 total tax expenses of about ¥2.4 billion “as the difference in amounts resulting from the different corporate tax rates between Japan, the United States and South Korea (the difference of the amount of the additional taxes in Japan and the tax refunds in the United States and South Korea) and the additional amount in conjunction with the imposition of additional taxes”.

more across site & shared bottom lb ros

More from across our site

If the US doesn't participate in pillar two then global consensus on the project can’t be a reality, tax academic René Matteotti also suggests
If it gets pillar two right, India may be the ideal country that finds a balance between its global commitments and its national interests, Sameer Sharma argues
As World Tax unveils its much-anticipated rankings for 2026, we focus on EMEA’s top performers in the first of three regional analyses
Firms are spending serious money to expand their tax advisory practices internationally – this proves that the tax practice is no mere sideshow
The controversial deal would ‘preserve the gains achieved under pillar two’, the OECD said; in other news, HMRC outlined its approach to dealing with ‘harmful’ tax advisers
Former EY and Deloitte tax specialists will staff the new operation, which provides the firm with new offices in Tokyo and Osaka
TP is a growing priority for West and Central African tax authorities, writes Winnie Maliko, but enforcement remains inconsistent, and data limitations persist
The UK tax agency has appointed six independent industry specialists to the panel
The two tax partners have significant experience and expertise in transactional and tax structuring matters
Katie Leah’s arrival marks a significant step in Skadden’s ambition to build a specialised, 10-partner London tax team by 2030, the firm’s European tax head tells ITR
Gift this article