Tax Treatment of Triangular Mergers by Foreign Companies Made Simpler

Establishment of new subsidiaries made possible

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August 02, 2007

  • Kazuhiro Yoshii

Summary

◆Revised regulations for the implementation of corporate taxation Law announced by the Ministry of Finance (MOF) on 13 April 2007.


◆Under the new regulations, in the event of the triangular merger of a Japanese company with a foreign company, providing the company established in Japan by the acquiring company (parent company) has commenced preparation for operations in Japan, the proposed merger will be deemed a qualifying merger and tax paid by the disappearing company treated as deferred taxation.


◆The revised regulations are applicable with effect from the official announcement date.

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