eoi report 2017 outline of s with regard to exchange of ... · information under tax conventions,...
TRANSCRIPT
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November 2017 National Tax Agency
JAPAN
EOI Report 2017
Outline of Achievements with regard to Exchange of Information under Tax Conventions, etc. in Operation Year 2016 International trends on exchange of information
As economies grow more globalized, asset holdings and investments by companies and individuals have become increasingly sophisticated and diversified. Furthermore, due to reports on so-called "Panama Papers" and Base Erosion and Profit Shifting ("BEPS"), the public interest is increasing against overseas asset concealment by wealthy people and international tax avoidance by multinational enterprises ("MNEs").
Under these circumstances, G20 and OECD will further promote cooperation and collaboration among national tax authorities to cope with international tax evasion and tax avoidance.
In particular, since the G20 London Summit held in April 2009, the importance of expanding the exchange of information based on tax conventions, etc. has become a common recognition in the international community. For example, the OECD formulated the Common Reporting Standard ("CRS") in order to mutually exchange information on financial accounts of non-residents among national tax authorities, and G20 has issued a joint communique to start exchange of information based on the CRS by 2018.
In addition, it was recommended in the OECD's BEPS Final Report to require certain multinational enterprise ("MNE") groups to submit the Country-by-Country Report ("CbCR") describing the amount of income by country, etc. This CbCR shall be submitted by the ultimate parent company of a MNE group to the tax authority of the jurisdiction of residence, and the tax authority then providess the CbCR with the tax authorities of the jurisdiction of residence of the MNE group's subsidiaries, etc.
The National Tax Agency ("NTA") will continue to proactively exchange information with foreign tax authorities under tax conventions, etc. in response to these international trends, and strive to effectively identify and prevent international tax evasion and tax avoidance.
The NTA's achievements with regard to exchange of information during Operation Year
2016 (July 2016 through June 2017) are described below.
* There are three types of exchange of information under tax conventions, etc.: exchange of information on request, spontaneous exchange of information and automatic exchange of information (AEOI). The achievements with regard to exchange of information are also classified into these types.
* Please refer to page 13 for the current situation of exchange of information network in
Japan.
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1. Exchange of information on request [Key points]
Graph 1 Trends in exchange of information on request
535
720
526
366
473
151
106 125158
415
0
100
200
300
400
500
600
700
800
2012 2013 2014 2015 2016
Number of NTA's requests of exchange of information
Number of requests of exchange of information from foreign tax authorities
（Operation
Year）
（No. of cases）
The NTA carries out exchange of information on request utilizing its broad network of information exchange.
The number of requests of exchange of information from the NTA to foreign tax
authorities was 473. Although it was on a downward trend since Operation Year 2013, it turned to an increase in Operation Year 2016. It is expected that it will continue to increase in the future against the backdrop of strengthening cooperation and collaboration among national tax authorities. Broken down by region, the number of requests to jurisdictions in Asia and Pacific, which have strong economic relationship with Japan, was 391, accounting for about 80% of the total.
The number of requests of exchange of information from foreign tax authorities to
the NTA was 415. It has increased for three consecutive years since Operation Year 2013.
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Graph 2 Trends in NTA's exchange of information on request to foreign tax authorities by region
○ The term "exchange of information on request" means that a tax authority requests
the foreign tax authorities to collect and provide specific information when the former authority is unable to ascertain facts with domestically available information alone in the course of tax examination.
○ Exchange of information on request has become an effective tool for figuring out the international transactions, overseas asset holdings and investments of taxpayers.
○ Specifically, through exchange of information on request, the following information can be obtained from the foreign tax authorities: foreign companies' financial statements, etc., written agreements, invoices, transaction statements of bank accounts, and information obtained from direct interviews by examiners of foreign tax authorities with persons in charge of transactions.
A case example of exchange of information on request
☆ [A case example utilizing the information provided to the NTA by foreign tax authorities at the NTA's request]
In the course of corporate tax examination of a Japanese company, the NTA found some suspicious points in its fee allegedly paid to Resident B in Country A, an export customer of its products, which led to a request by the NTA to the tax authorities in Country A to check the accounting of the said fee. The tax authorities in Country A made contact with Resident B and checked the accounting to discover that there was a significant difference between the amount of fee allegedly paid by the Japanese company and the amount actually received by Resident B and NTA found that the Japanese company had fictitiously recorded the fee payment.
331
469
396
291
391
166191
7544 60
3860 55 31 22
0
50
100
150
200
250
300
350
400
450
500
2012 2013 2014 2015 2016
Asia and Pacific Americas Europe and others
（No. of cases）
（OperationYear）
4
2. Spontaneous exchange of information
[Key points]
From the standpoint of international cooperation, the NTA spontaneously provides information to foreign tax authorities.
The number of cases of spontaneous exchange of information where the NTA
provided information to foreign tax authorities was 272, which was almost the same in the average year. Especially in Operation Year 2013, the number of cases increased due to special efforts to provide information on overseas remittances. Broken down by region, the number of cases of spontaneous exchange of information to jurisdictions in Asia and Pacific was 103, the largest among all areas.
The number of cases of spontaneous exchange of information where foreign tax authorities provided information to the NTA totaled 549. Although it was on a downward trend since Operation Year 2013, it turned to an increase in Operation Year 2016 due to the effect of the recommendations of BEPS Project.
Graph 3 Trends in spontaneous exchange of information
472
6,881
317186 27292
3,062
1,258
33549
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2012 2013 2014 2015 2016
Number of cases of spontaneous exchanges of information where the NTA provided
information to foreign tax authorities
Number of cases of spontaneous exchanges of information where foreign tax authorities
provided information to the NTA
（No. of cases）
（OperationYear）
5
Graph 4 Trends in NTA's spontaneous exchange of information to foreign tax authorities by region
○ In "spontaneous exchange of information" scheme, a tax authority spontaneously
provides foreign tax authorities with information it has obtained through domestic tax examinations, etc., which it considers beneficial to foreign tax authorities from the viewpoint of international cooperation.
A case example of spontaneous exchange of information
☆ [A case where the NTA spontaneously provided information to foreign tax authorities]
While a Japanese company imports products from Company D located in Country C, the purchase payments are remitted to the account of Company E located in a third country other than country C. As it was suspected that Company D might have excluded the sales to be declared in Country C, the NTA provided the documents concerning the remittance and transactions to the tax authorities in Country C.
318
1,936
228 142 10397
2,284
74 12 7457
2,661
15 32 95
0
500
1,000
1,500
2,000
2,500
3,000
2012 2013 2014 2015 2016
Asia and Pacific Americas Europe and others
（No. of cases）
（OperationYear）
6
3. Automatic exchange of information [Key points]
The NTA exchanges information with foreign tax authorities on financial assets in order to enhance transparency on overseas assets.
Due to improved efficiency of administrative processing by utilizing the ICT, the
number of cases of automatic exchange of information where the NTA provided information to foreign tax authorities totaled about 531 thousand, greatly exceeding the previous Operation Year. It is expected that it will further increase after Operating Year 2018 in which automatic exchange of information based on the CRS starts. Broken down by region, provision of information to Europe and other jurisdictions, to where interest, dividends, etc. are frequently paid from Japan, accounts for the majority.
The number of cases of automatic exchange of information where foreign tax authorities provided information to the NTA totaled about 205 thousand, which was an increase from the previous Operation Year.
Graph 5 Trends in automatic exchange of information
91 126 137
188
531
125 133 132 117
205
0
100
200
300
400
500
600
2012 2013 2014 2015 2016
Number of cases of automatic exchanges of information where the NTA provided
information to foreign tax authorities
Number of cases of automatic exchanges of information where foreign tax authorities
provided information to the NTA
No. of cases (in thousand）
（OperationYear）
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Graph 6 Trends in NTA's automatic exchange of information on request to foreign tax authorities by region
○ In "automatic exchange of information" scheme, tax authorities in remitting countries
provide information in one package on such items as payment to non-residents and others identified by Information Returns, including interests, dividends, rents on real estate, royalties, salaries, consideration for receipt of stock transfer to the tax authorities in receiving countries.
○ The NTA compares information provided by foreign tax authorities through automatic exchange of information with the content of tax returns filed by taxpayers and conducts tax examinations of taxpayers whose overseas assets, etc. need to be checked.
A case example of automatic exchange of information
☆ The NTA obtained from the tax authorities in Country E the information on interest received by Resident F in Japan from foreign financial institution (Bank G). The NTA then compared such information with the tax filing by Resident F and found that the person had failed to report the interest received on his deposit at Bank G in Country E.
26 27 38 36
70
27 47 46
63
167
38 52 54
89
294
0
50
100
150
200
250
300
24 25 26 27 28
Asia and Pacific Americas Europe and others
（No. of cases）
（OperationYear）
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«Reference 1» Automatic exchange of information on financial accounts of non-residents based on the Common Reporting Standard (CRS)
○ In order to meet the Common Reporting Standard ("CRS") and the Commentaries formulated by the OECD, Japan introduced a system in the tax reform of FY2015, in which each financial institution located in Japan is required to report to the District Director of the Tax Office information including account holder's name, address, jurisdiction of residence, foreign taxpayer identification number, account balance or value, and total annual gross amount of interests, dividends and other revenues received, etc. The new system became effective on January 1, 2017 and starting 2018, each financial institution in Japan will be required to report to the District Director of the Tax Office information on financial accounts of non-residents of the previous year by April 30 of each year. Reported financial accounts information will be provided to foreign tax authorities based on the provision for exchange of information in tax conventions, etc. In addition, the NTA will broadly be provided by foreign tax authorities with information on offshore financial accounts held by residents of Japan at foreign financial institutions.
○ As of November 2017, 102 jurisdictions including Japan committed to start automatic exchange of information under the CRS by 2018. However, it does not mean that Japan will immediately exchange information with all of 101 jurisdictions and there may be cases where exchange of information cannot be carried out depending on the status of development of domestic legislation and the security situation of financial institutions in the partner jurisdiction. As of November 2017, Japan may exchange information with 64 jurisdictions.
○ Automatic exchange of information on financial accounts of non-residents based on the CRS is carried out via the Common Transmission System ("CTS") developed by the OECD. A high level of security is assured by requiring the authentication by a pre-registered electronic certificate for the access to the CTS and by encrypting the communication path.
○ Implementation of automatic exchange of information on financial accounts of non-residents based on the CRS is expected to contribute to identifying and preventing tax evasion and tax avoidance using foreign financial institutions.
○ In order to explain the system in detail, the NTA sets up "CRS Section" on its website (http://www.nta.go.jp/sonota/kokusai/crs/index.htm), which posts related information (such as leaflets, FAQs and public information from the OECD). The NTA also makes an effort to provide thorough information and publicity about the CRS to financial institutions and taxpayers.
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A国の
税務当局
B国の
税務当局
【A国】
A
B
報告金融機関等
B国居住者口座
A国居住者口座
⑵ 既存特定取引を行った
者（居住者を含む）の住所
等所在地国を特定
⑶ 報告対象となる契約を締結して
いる非居住者の氏名・住所（名称・所
在地）、居住地国、外国の納税者番号、
口座残高、利子・配当等の年間受取総
額等を報告
【平成 30年に平成 29年分を報告】
⑷ 租税条約等に基づき、外国の税務当
局に対して年一回まとめて情報提供
【H30年に初回の情報交換】
国税庁
A国居住者
B国居住者
【B国】
日本居住者口座等
⑴ 新規特定取引を行う者
（居住者を含む）による氏
名・住所（名称・所在地）、
居住地国、外国の納税者番
号等の届出
【平成 29 年から金融機関
による手続き開始】
【日本】
［ＣＴＳによる情報交換のイメージ］
CTS(Common Transmission System)は、CRSに基づく情報交換を実施するため、
OECD主導で開発された共通通信システム。CRSに基づく情報は全てCTSを経由
して交換される。
CTS概要
金融機関
Ａ国税務当局
金融機関
金融機関
金融機関
Ｂ国税務当局ＣＴＳ
各国税務当局は、金融機関等からの報告を国別に集約し、CTSへ送信。また、自国向けの情報をCTSを経由して受信する。
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Reporting System for Automatic Exchange of Information on Financial Accounts of Non-Residents (scheme image)
Exchange of Information through the CTS (scheme image)
(1) Submission of a self-certification which indicates name, address (location), jurisdiction of residence, foreign taxpayer identification number by those who open a financial account with a reporting financial institution. [Processing by financial institution starts in 2017.]
(2) Determination of jurisdiction of residence of each holder (including residents of Japan) of preexisting account .
Reporting Financial Institutions
[JAPAN]
Accounts of Residents of Japan
National Tax Agency
Tax Authority of Jurisdiction
A
Residents of Jurisdiction
A
Accounts of Residents of Jurisdiction A
(3) Reporting of name, address (location), jurisdiction of residence, foreign taxpayer identification number, account balance or value, and total annual gross amount of interest and dividends received, etc. regarding each holder of new account or preexisting account which is subject to reporting financial institution. [2017 figures to be reported in 2018.]
Accounts of Residents of Jurisdiction B
[Jurisdiction B]
[Jurisdiction A]
Tax Authority of Jurisdiction
B
Residents of Jurisdiction
B (4) Provision of collective information once a year to foreign tax authorities in accordance with tax treaties.
Financial Institution
Financial Institution
Financial Institution
Financial Institution
Tax Authority of Jurisdiction
A
Tax Authority of Jurisdiction
B
Tax authorities in each jurisdiction aggregate the reports from financial institutions by jurisdiction and send them to the CTS. They also receive information for their own jurisdictions via the CTS.
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JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2017 (49)
JURISDICTIONS UNDERTAKING FIRST EXCHANGES BY 2018 (53)
Anguilla, Argentina, Belgium, Bermuda, British Virgin Islands, Bulgaria, Cayman Islands, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Faeroe Islands, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey,
Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Montserrat, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Seychelles, Slovakia, Slovenia, South Africa, Spain, Sweden, Turks and Caicos Islands, United Kingdom
Andorra, Antigua and Barbuda, Aruba, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Barbados, Belize, Brazil, Brunei, Canada, Chile, China, Cook Islands, Costa Rica, Curacao, Dominica, Ghana, Greenland, Grenada, Hong Kong Indonesia, Israel, Japan, Kuwait,
Lebanon, Macao, Malaysia, Marshall Islands, Mauritius, Monaco, Nauru, New Zealand, Niue, Pakistan, Panama, Qatar, Russia, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Saudi Arabia, Singapore, Sint Maarten, Switzerland, Trinidad and Tobago, Turkey, United Arab Emirates, Uruguay, Vanuatu
Status of Commitments to implementing AEOI standard
(As of November 1, 2017)
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«Reference 2» Country-by-Country Report (CbCR) ○ For the purpose of understanding the global business activities and the actual situation of
tax payment conducted by multinational enterprises (MNEs), based on the recommendation of the BEPS Project, relevant corporations became obligated to provide (or create and store) the following information to Tax Offices after the FY2016 tax reform: (1) information concerning business activities conducted by MNE groups by country (“Country-by-Country (CbC) Report”), (2) information concerning the overall global business activities conducted by MNE groups (“master file”), and (3) detailed information for calculating arm’s length price for transactions with related parties (“local file”).
○ The ultimate parent entity of an MNE group that earns a total revenue of 100 billion yen or
more in the preceding fiscal yearis required to submit a CbC Report and a master file via e-Tax no later than 12 months after the last day of the fiscal year(this applies from the fiscal yearthat begins on or after April 1, 2016). Based on the automatic exchange of information prescribed in tax treaties, etc., a CbC Report is to be transmitted to the tax authority of the residence country of the constituent entity of an MNE group. Japan will begin providing information for foreign tax authorities by September 2018 and will also begin receiving information equivalent to a CbC Report from other countries.
マスターファイル＜親会社が作成＞
グループの組織図 事業概要 保有する無形資産の情報 グループ内金融活動に
関する情報 グループ全体の財務状況と
納税状況
国別報告事項＜親会社が作成＞
親会社・子会社所在国ごとの多国籍企業グループの下記情報 総収入・利益・税額・
資本金等の財務情報 従業員数 有形資産額 主要事業 等
組織図 経営戦略 主要な競合他社 主要な関連者間取引と
取引背景 移転価格算定根拠 財務諸表 等
ローカルファイル＜親・子会社が各々作成＞
多国籍企業情報の報告制度
《作成・保存》※※調査官が提示等を求めた日から一定の期日までに提示等をする必要がある。
税 務 当 局
外国の税務当局
国別報告事項に相当する情報
国別報告事項の情報提供
提供提供
◇ Organization chart ◇ Business strategy ◇ Major competitors ◇ Major transactions among related
parties and transaction background ◇ Transfer pricing calculation basis ◇ Financial statements, etc.
Country-by-Country Report <prepared by the parent company>
◇ The following information on an MNE group by country where the parent company and the subsidiaries are located:
◇ Financial information including total revenue, profit (loss), tax amount, stated capital, etc.
◇ Number of employees ◇ Amount of tangible assets ◇ Major business activities, etc.
<<Preparation and storage>>* * Local files are required to be presented by a certain
appointed day that comes after the day when a tax examiner requests to present local files.
Master file <prepared by the parent company>
◇ Group organization chart ◇ Business overview ◇ Information on intangibles held ◇ Information concerning financial activities
within the group ◇ Financial situation and the tax payment
status for the entire group
Provision
Tax Authorities
Provision of information with a Country-by-Country Report
Information equivalent to a Country-by-Country Report
Foreign Tax Authorities
Reporting system of information on multinational enterprises
Local file <Separately created by the parent
company and each subsidiary>
Provision
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«Reference 3» Current situation of exchange of information network in Japan
[Key points]
As the importance of exchange of information became globally recognized, Japan's exchange of information network extended to cover 123 jurisdictions.
○ In Japan, 69 bilateral tax conventions, etc.* are in effect as of November 1, 2017. A provision for implementing exchange of information is included in all the tax conventions, etc. Tax conventions, etc. with the following jurisdictions took effect recently: Chile (December 2016), Panama (March 2017), Latvia (July 2017) and Slovenia (August 2017).
(*) Bilateral tax conventions, etc. include tax conventions, tax agreements, tax information exchange agreements and the private-sector arrangement with Taiwan.
○ In Japan, the Convention on Mutual Administrative Assistance in Tax Matters (hereinafter called the "Convention on Mutual Administrative Assistance") entered into force as a multilateral framework on October 1, 2013. This Convention on Mutual Administrative Assistance is a multilateral convention and aims to have parties offer the following administrative assistance in tax matters (exchanges of information, assistance in recovery and service of documents). The conclusion of this Convention has enabled Japan to exchange information with more jurisdictions. As of November 2017, the Convention on Mutual Administrative Assistance entered into force in 84 countries excluding Japan.
○ With the bilateral tax conventions, etc. and the Convention on Mutual Administrative Assistance, the exchange of information network in Japan covers 123 jurisdictions as of November 2017.
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Russia and New Independent States (12)
Armenia Georgia Moldova Turkmenistan Azerbaijan Kazakhstan Russia Ukraine Belarus Kyrgyz Tajikistan Uzbekistan
Ministry of Finance Japan
《70 conventions, etc. applicable to 123 jurisdictions; as of November 1, 2017》 (see notes 1 and 2)
Europe (42)
Austria Norway Belgium Poland Bulgaria Portugal Czech Romania Denmark Slovakia Finland Slovenia France Spain Germany Sweden Hungary Switzerland Ireland United Kingdom
Italy Guernsey (*) Latvia Isle of Man (*) Luxemburg Jersey (*) Netherlands Liechtenstein (*)
(No bilateral convention with Japan) Albania Greece Andorra Greenland Croatia Iceland Cyprus Lithuania Estonia Malta Faroe Islands Monaco Gibraltar San Marino
America and the Caribbean (26)
Brazil Canada Chile Mexico United States Bahamas (*) Bermuda (*) British Virgin Islands (*) Cayman Islands (*) Panama (*) (No bilateral convention with Japan) Anguilla Aruba Argentina Barbados Belize Colombia CostaRica Curacao Guatemala Montserrat Saint Christopher and Nevis Saint Lucia Sint Maarten Saint Vincent and the Grenadines Turks and Caicos Islands Uruguay
Asia and Pacific (24)
Australia China India New Zealand Singapore Thailand Samoa (*) Bangladesh Fiji Indonesia Pakistan Korea Vietnam Taiwan (see note 3)
Brunei Hong Kong Malaysia Philippines Sri Lanka Macao (*)
(No bilateral convention with Japan)
Cook Islands Marshall Islands Nauru Niue
Middle East (8)
Israel Saudi Arabia
Kuwait Turkey
Oman United Arab Emirates
Qatar
(No bilateral convention with Japan) Lebanon
Africa (11)
Egypt Zambia
South Africa
(No bilateral convention with Japan)
Cameroon Senegal Ghana Seychelles
Mauritius Tunisia
Nigeria Uganda
(Note 1) Since the Convention on Mutual Administrative Assistance in Tax Matters is a multilateral convention, and the tax conventions with the former Soviet Union and with the former Czechoslovakia were succeeded by
more than one jurisdiction, the numbers of jurisdictions do not correspond to those of tax conventions, etc. (Note 2) The breakdown of the numbers of conventions, etc. and jurisdictions is as follows:
Tax convention (a convention principally for the elimination of double taxation and the prevention of tax evasion and avoidance); 57 conventions applicable to 68 jurisdictions. Tax information exchange agreement (a convention principally for the exchange of information regarding tax matters); 11 conventions applicable to 11 jurisdictions (These jurisdictions are marked with (*) above). Convention on Mutual Administrative Assistance in Tax Matters; Entered into force by 84 jurisdictions (not including Japan) (These jurisdictions are underlined above) and applicable to 99 jurisdictions due to the
extension of the application of the Convention (Jurisdictions to which the Convention is extended are underlined above with dotted lines). 43 jurisdictions out of 99 do not have a bilateral convention with Japan.
Private-sector tax arrangement with Taiwan; 1 jurisdiction (Note 3) As for Taiwan, a framework equivalent to a tax convention is established in combination of (1) a private-sector tax arrangement between the Interchange Association (Japan) and the Association of East Asian
Relations (Taiwan) and (2) Japanese domestic legislation to implement the provisions of the private-sector tax arrangement in Japan.