Transfer pricing in Japan

 Transfer pricing in Japan at a glance

Regulation Type National regulations with reference to the OECD
Are there specific transfer pricing regulations? Yes
Submission deadline Upon request
Submission deadline upon request Directly
Annual update required N/A
Official language requirements Japanese
Potential impact of penalties N/A


Japanese tax law

Rules for transfer pricing in Japan are based upon:

  • Special Taxation Measures Law article 66-4/66-4-2
  • Special Taxation Measures Law article 68-88/ 66-88-2


Rules for transfer pricing in Japan generally follow the OECD Transfer Pricing Guidelines. However, in case of a dispute national regulations mostly prevail.


Accepted methods

Accepted methods are:

  • the comparable uncontrolled price method
  • the resale price method
  • the cost plus method
  • the profit split method
  • the transactional net margin method
  • similar methods that result in an arm’s length price

Priority of methods

Rules for transfer pricing in Japan prescribe that the best method should be used.

Documentation requirements

Information that should be provided:

  • Information that shows that controlled transactions were conducted under conditions similar to those of uncontrolled transactions, such as pricing policies used in business, intercompany agreements and negotiation processes with affiliated companies on pricing.
  • Information about comparables and transfer pricing methods.


Japanese is the only language the documentation should be prepared in.

Preparation deadline

Rules for transfer pricing in Japan prescribe that documentation should be available before entering a transaction.

Deadline to submit upon request

Upon request of the Japanese tax authorities, documentation must be submitted without delay.

Advance Pricing Agreements


Both unilateral and bilateral Advance Pricing Agreements (APA) are available in Japan.


APA ‘s are generally agreed upon for a period of three to five years; rollback is available on bilateral APAs.


Rules for transfer pricing in Japan do not provide for specific transfer pricing penalties. This means that ordinary penalties apply.