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

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
Several factors have led to a steady transition of TP work away from traditional advisers and towards full-service law firms, DLA Piper’s new TP leader says
Julian Balson's departure from EY's Tier 1 tax controversy practice for lower-ranked Fieldfisher represents one of the more eye-catching UK hires of the year
Former IRS commissioner Danny Werfel argues that the biggest obstacle to AI adoption in tax is not technology, but trust, and introduces a practical AI risk framework to help
Howell takes a deep dive into how he led the landmark PepsiCo dispute, discusses the ATO's enforcement priorities, and emphasises KordaMentha's market ambitions
Global tax leader David Linke said that the TaxSim gaming programme could replace aspects of traditional face-to-face learning
Former ATO economist Craig Silverwood is joining from Australian firm MinterEllison
The rebranding, which will see changes to signage, visual identity and digital properties, is scheduled to be completed by the end of this year
The software space was previously more fragmented, but that model is becoming more difficult to sustain as tax administration becomes increasingly digitised
Gift this article