In this section, we provide a summary of brief updates from the previous quarter on legislative, judicial, and administrative developments in tax that may impact Japanese companies operating in the United States.

Potential tax benefits under section 1341

May 18, 2022

Section 1341 may provide a permanent benefit in the form of rate relief, ability to use otherwise nondeductible capital losses, or an immediate refund for net operating loss positions.

Capturing a Permanent Tax Benefit from Previously Taxed Income (PDF)

Proposed changes to qualified intermediary (QI) agreement (Notice 2022-23)

May 18, 2022

The IRS on May 3, 2022 released an advance version of Notice 2022-23 that sets forth the proposed changes to the qualified intermediary (QI) agreement described in Reg. section 1.1441-1(e)(5) and (6).

KPMG Report: Proposed changes to qualified intermediary (QI) agreement (Notice 2022-23) (PDF)

GLAM: Allocation and apportionment of deferred compensation expense for purposes of calculating FDII—departure from prior IRS legal advice

May 6, 2022

The IRS today publicly released a generic legal advice memorandum (GLAM) that addresses the proper method of allocation and apportionment under the section 861 regulations of deferred compensation expense for purposes of computing a taxpayer’s foreign-derived intangible income (FDII) deduction under section 250.

TaxNewsFlash No. 2022-143 (PDF)

IRS practice unit: Country-by-country (CbC) report in the transfer pricing risk analysis process

April 26, 2022

The IRS Large Business and International (LB&I) division publicly released a "practice unit" -part of a series of IRS examiner "job aides" and training materials intended to describe for IRS agents leading practices about tax concepts in general and specific types of transactions.

TaxNewsFlash No. 2022-130 (PDF)

Mexico: Changes introduced by new transfer pricing regulations

March 23, 2022

New transfer pricing regulations, introduced following the 2022 tax reform, include significant changes with regard to certain technical matters for taxpayers to consider when conducting a transfer pricing analysis, but also concern procedural elements that taxpayers and the tax authorities alike need to take into account during a tax examination or as part of an advance pricing agreement (APA), a mutual agreement procedure (MAP) request or an administrative or litigation procedure.

Mexico: Changes introduced by new transfer pricing regulations

Updated analysis of Pillar Two model rules for 15 percent global minimum tax following release of commentary

March 18, 2022

On March 14, 2022, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) involving more than 140 countries, released Commentary related to the Model GloBE Rules under Pillar 2, which were first released on December 20, 2021.

Inclusive Framework BEPS Agreement (PDF)

For more information, please contact:

Tai Kimura | +1 408 367 2204 |