Advance Tax Ruling Support
Tax considerations,
What Stage of Support Do You Need?
You can start at the stage you need. There is no requirement to purchase every service in sequence. Each service is a separate engagement. Whether the tax authorities respond to an advance inquiry, and the content of that response, are at their discretion.
Using professional support to confirm the tax authorities' position before a transaction
That tax judgment,
Confirm the position with the tax authorities.
You want to confirm the tax treatment before proceeding with a major transaction. In addition to a professional opinion, you want a written response from the national tax authorities. The written response procedure for advance inquiries is an option for that purpose.
Our principal and tax accountant, Kenji Yanagisawa, supports the process from assessing eligibility to preparing an inquiry setting out the facts, law, and proposed interpretation, responding to requests for additional documents and questions, and reviewing the response.
Relationship to So-Called No-Action Letters
No-action letters are known as a way to confirm an administrative authority's legal interpretation of a planned action in advance. Japan also has a procedure for advance confirmation of the application of laws and regulations.
The procedure discussed on this page is used to seek written confirmation from the national tax authorities of the tax consequences of a specific transaction:“Written Response Procedure for Advance Inquiries”The purpose is likewise to improve predictability by confirming the authorities' view in advance, but it is neither permission for tax exemption nor an unconditional guarantee that no tax will be imposed.
The applicant must do more than simply ask, “Will this be taxed?” The inquiry needs to set out specific facts, the interpretation sought, and the legal grounds supporting that interpretation.
How We Support You
Establish the facts and issues
We review the transaction terms and documents, determine whether the procedure applies, and consider what should be asked.
Present the interpretation and its basis
We review legislation, administrative guidance, and court decisions, summarize the applicant's interpretation and reasons, and prepare the necessary supporting materials.
Support Through to the Response
We handle requests for additional documents, amendments, and questions. If a response is received, we explain its assumptions and content.
When the Procedure Can Be Used—and When It May Be Difficult
Cases in Which an Inquiry May Be Appropriate
This applies to specific completed or planned transactions where the inquiry can be made before filing deadlines and the necessary documents can be submitted. We consider issues whose treatment is not clear from existing guidance and similar materials.
Consent to publication of the inquiry and response is also required. The applicant's name is not published unless requested, but publication of transaction details needs to be discussed with all relevant parties.
Main Cases Outside the Procedure's Scope
- The underlying facts involve alternative possibilities
- The inquiry concerns a specific asset valuation or the appropriateness of a transaction price
- Establishing the facts requires an on-site investigation or similar verification
- Inquiries concerning tax audit or collection procedures themselves
An inquiry may be found ineligible even after it has been accepted.
The procedure may be difficult to use where establishing the facts is central—for example, determining non-resident status when future living arrangements are not yet settled. In such cases, we consider using a discussion paper or tax opinion to clarify assumptions and risks.
How Long Does a Response Take?
Current National Tax Agency Guidance
- Within approximately 1 month: An oral explanation of the likelihood of a written response, expected processing timing, and related matters
- As early as possible, generally within 3 months: The authorities aim to provide a written response
In each case, time required to submit additional materials or amend the inquiry is excluded. Complex transactions may take longer; these periods do not guarantee a response date.
This does not mean that a final oral answer is issued within 1 month or that a written answer is guaranteed within 3 months. It is important to work backward from transaction and filing deadlines and allow time to prepare documents and communicate with the authorities.
Filing deadlines and other deadlines are not extended while you await a response. No response will be provided once the relevant transaction's filing deadline or other applicable deadline has passed, so please consult us early.
Source:National Tax Agency: Written Responses to Advance Inquiries on Tax Treatment
The system has continued to evolve since its introduction
2001: Introduction of the Written Response Procedure
Following the 2001 administrative guidelines on written responses to advance inquiries, processing procedures were developed in 2002 alongside the establishment of legal examination divisions and officers at regional taxation bureaus.
2004: Scope expanded to inquiries concerning individual circumstances
Following criticism of the original system, its scope was expanded to address inquiries concerning the individual circumstances of specific taxpayers. Research by the National Tax College also discusses this revision.
Reference:Research paper in National Tax Agency Tax College Research Journal, No. 44
2011: Early guidance on prospects and expanded deferral of publication
In response to concerns about uncertainty over whether and when a response would be provided, a practice was introduced of giving an oral explanation, generally within one month of the inquiry, of the prospects for a written response and the expected processing timeframe.
The period for deferring publication of inquiry details was also extended from 180 days to a maximum of 1 year. This “1 year” is the possible publication deferral period, not the response period.
Source:National Tax Agency: Partial Revision of the Written Response Procedure for Advance Inquiries
Rather than rule it out based on past impressions, we assess whether the current system suits the transaction and timetable.
How This Differs from a Tax Opinion
A tax opinion records a professional's interpretation in writing. Advance inquiry support also involves procedures with the tax authorities and subsequent responses to questions and document requests.Cases where confirming the authorities' position before the transaction is valuable, we consider using the procedure.
However, this does not guarantee the desired response, or any response at all. A response is based on the assumptions presented in the inquiry and does not bind the taxpayer's tax return or other submissions. If the assumptions change, the matter must be reconsidered.
Three Levels of Support to Match Your Objectives
You can start at the stage you need. There is no requirement to purchase every service in sequence. Each service is a separate engagement. Whether the tax authorities respond to an advance inquiry, and the content of that response, are at their discretion.
Fees
| Initial consultation | JPY 55,000 per hour Where consumption tax applies, it is included in the displayed price. Where export exemption applies, the full displayed amount is the consultation fee. Your total payment remains the same in either case. |
|---|---|
| Advance Tax Ruling Support | JPY 2,000,000 per issue, excluding tax JPY 2,200,000 including tax |
Support includes communications with the authorities as well as preparation of the inquiry. Before starting, we confirm the number of issues, the transaction, and the scope of support, then provide a quotation. The initial consultation is charged separately.
Before engagement, we clarify how matters will be handled if no response is obtained, the response differs from the desired interpretation, or plans and issues change.
Choose How You Would Like to Consult Us.
Consult Directly with Kenji Yanagisawa, Principal and Certified Tax Accountant
For a direct 60-minute consultation with our principal, tax accountant Kenji Yanagisawa, without a preliminary email inquiry, book here. The fee is JPY 55,000 for either an online or in-person consultation.
Where consumption tax applies, it is included in the displayed price. Where export exemption applies, the full displayed amount is the consultation fee. Your total payment remains the same in either case.
You will proceed to the card payment screen. After your application, we will arrange the consultation date, time, and format.
Start with an Email Inquiry
Email inquiries are free. Tell us about the issue you are facing or what you would like to discuss. We will review your inquiry and recommend a paid consultation if you need specific tax judgments or advice.
There is no charge for submitting an inquiry. Please also use this form if you prefer to pay by bank transfer.
Document preparation and advance inquiry support require a separate engagement and fee.