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March 30, 2016
2016-0587

Japan enacts 2016 tax reform bill

Japan enacted the 2016 Tax Reform Bill (the Bill) on March 29. The outline for the Bill was released on December 16, 2015 and the Bill was submitted to the Diet on February 5 for passage. The Bill includes both favorable proposals, such as a further corporate tax rate reduction, and unfavorable proposals, such as a greater limitation of an annual net operating loss (NOL) deduction. The new transfer pricing documentation rule is in line with the Organisation for Economic Co-operation and Development's (OECD) Guidance on Transfer Pricing (TP) Documentation and Country-by-Country Reporting (CbCR) as a part of the Base Erosion and Profit Shifting (BEPS) project.

A Tax Alert prepared by Ernst & Young's Global Tax Desk Network, and attached below, provides additional details.

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