International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

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.


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 & bottom lb ros

More from across our site

The forum heard that VAT professionals are struggling under new pressures to validate transactions and catch fraud, responsibilities that they say should lie with governments.
The working paper suggested a new framework for boosting effective carbon rates and reducing the inconsistency of climate policy.
UAE firm Virtuzone launches ‘TaxGPT’, claiming it is the first AI-powered tax tool, while the Australian police faces claims of a conflict of interest over its PwC audit contract.
The US technology company is defending its past Irish tax arrangements at the CJEU in a final showdown that could have major political repercussions.
ITR’s Indirect Tax Forum heard that Italy’s VAT investigation into Meta has the potential to set new and expensive tax principles that would likely be adopted around the world
Police are now investigating the leak of confidential tax information by a former PwC partner at the request of the Australian government.
A VAT policy officer at the European Commission told the forum that the initial deadline set for EU convergence of domestic digital VAT reporting is likely to be extended.
The UK government shows little sign of cutting corporate tax, while a growing number of businesses report a decline in investment as a result of the higher tax burden.
Mariana Morais Teixeira of Morais Leitão overviews Portugal’s new tax incentive regime designed to boost the country’s capital-depleted private sector.
Septian Fachrizal, TP analyst at the Directorate General of Taxes, outlines how Indonesia is relying heavily on the successful implementation of pillar one.