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- “Study Group on the GloBE Rules and Controlled Foreign Company Taxation” to be Inaugurated
“Study Group on the GloBE Rules and Controlled Foreign Company Taxation” to be Inaugurated
June 17, 2022
In light of the increasingly digitized economy, The Ministry of Economy, Trade and Industry (METI) will inaugurate a study group to discuss smooth introduction of the GloBE rules that was internationally agreed upon in October 2021, and how to organize relation with and simplify Controlled Foreign Company taxation ("CFC taxation"). The ministry will hold the group's first session on June 17 (Fri.).
1. Purpose of inaugurating the group
Japan is rapidly becoming an "Investment Nation," and profits that Japanese companies gain in growth markets overseas are very important to Japanese economy as population has been decreasing and thus the domestic market is shrinking. On the other hand, as the digital transformation of the economy accelerates, Japanese companies are facing increasing competition with foreign companies, and it has been pointed out that the challenges lie in price competitiveness and product development capabilities. In order to overcome these challenges, it is necessary to ensure a level playing field for Japanese and foreign companies and to support smooth business activities overseas from tax system side. For this reason—and taking into consideration that the GloBE rules that was internationally agreed upon in October 2021 has been discussed in the US, UK, EU, and elsewhere—METI will inaugurate the Study Group on the GloBE rules and Controlled Foreign Company Taxation in order to confirm points for future discussions toward the rule's smooth introduction in Japan, and to discuss how to organize its relation with and simplify "CFC taxation".
2. Examples of matters that the study group will discuss
Taking into consideration that the GloBE rules has been discussed in the US, UK, EU, etc, the following issues were discussed for example:
- Confirmation of future issues for smooth introduction of the the GloBE rules in Japan
- How to organize relation between the GloBE rules and “CFC taxation” and simplify it
3. Schedule, etc.
The first meeting will be held on June 17 (Fri.). The study group will meet twice more thereafter and summarize discussions by the end of this summer. This study group will not be open to public in order to ensure free exchange of opinions by its members but the handouts and summaries of minutes will be released in principle.
Division in Charge
Investment Facilitation Division, Trade and Economic Cooperation Bureau