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 2026

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

The big four firm has been embroiled in a scandal over partners’ misuse of confidential board papers to pitch for and win corporate audits for Westpac and Dexus
Drawing on lessons from the PepsiCo case, tax lawyer Paul McNab explains why the ATO's latest royalty guidance should concern multinationals well beyond the technology sector
As pillar two exposes the limits of fragmented tax processes, organisations are rethinking their operating models to create the trusted data foundations that AI demands
World Tax data shows Matt Donnelly is moving from a Tier 3 transactional tax practice to a Tier 1 market leader, underlining Kirkland & Ellis’s pull at the top end of the market
Nexdigm's Maulik Doshi and infer360 co-founder Sunil Agarwal dig deeper into their partnership and discuss why the tax technology industry is consolidating
Advisers won’t be short of work in a world of increased valuation disputes, documentation requirements and behavioural responses from clients seeking to protect their wealth
Jaydeep Menon explains how Frazier & Deeter built a specialist practice which helps UK start-ups expand into the US and why private equity backing is accelerating its ambitions
As joint audits, data sharing and pillar two reshape tax controversy, multinational groups can no longer afford to manage disputes one jurisdiction at a time
Brazil's tax system is being reshaped by VAT , pillar two and TP reform. Fallet explains why those changes convinced him to lead a new practice
The agreement with Daribatech, alongside recent high-profile investment in talent, suggests the firm is gearing up for a significant push in the region
Gift this article