Handling of tax audits and disputes

It is no longer unusual that taxation decisions by the tax offices in Japan involving a large amount of tax are denied at court. This makes it increasingly important for law firms to be involved from the stage of tax audits and administrative review to see the case from attorney’s eyes. DT Legal Japan provides comprehensive support through close coordination with tax specialists to ensure clients achieve the most effective results.

Global Network and Collaboration with Tax Professionals

DT Legal Japan is not only a member firm of the Deloitte Tohmatsu Group with specialists from tax, audit and consulting services across Japan. It is also a Japanese member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), which consists of member firms in over 150 countries around the world. DT Legal Japan provides clients with comprehensive legal services in a timely manner to meet their various business needs in close coordination with approximately 2,000 attorneys in the 80 countries of Deloitte Legal, i.e., Deloitte’s legal practices.

Need for legal services by legal attorneys may arise while, or as a result of, receiving other professional services. For example, Clients will be able to receive from an initial stage legal opinions by legal attorneys on tax-related legal issues, such as reasonable interpretation of contractual terms or the most appropriate and effective legal strategy among various available options that will often become an issue in tax audits or subsequent administrative procedures by the tax authorities.
Companies can seek advice from legal attorneys or tax accountants from as early a stage as the drafting of contractual terms in order to prepare for potential tax risks before a case develops into a tax audit, dispute or possible lawsuit.

Furthermore, in regard to applications for an Advance Pricing Agreement (APA) for transfer pricing purposes, DT Legal Japan can provide full support to companies in collecting and analyzing evidence to be submitted to tax authorities, utilizing not only the Deloitte Tohmatsu network in Japan but also the Deloitte global network. This will help companies to avoid unnecessary disputes with Japanese and overseas tax authorities.

Key Services

Advice on tax issues
• Advice on the interpretation of underlying laws/regulations/contractual terms and other legal issues

Interpretation of tax laws requires not only the interpretation of each article in tax-related laws, but also that of all relevant laws and regulations including the Companies Act, Civil Code. It also requires assessing and analyzing precedents based on in-depth legal knowledge, which is all an important mission for attorneys. Companies need to draft prudent contractual terms based on underlying laws and regulations as well as assessment of precedents in view of tax audits, disputes or possible lawsuits that may arise in the future as an effective means to prepare for potential tax risks.
DT Legal Japan helps companies with preparing for tax risks during normal operations through collaboration with tax accountants at any time needed.

Support for Tax Audit and Dispute Resolution
• Tax audit representation
• Support for tax dispute resolution, e.g., filing of appeals with tax offices/National Tax Tribunal, request for examination, and tax lawsuits
One of the most important tasks to win any lawsuits is to make consistent and convincing arguments and presentation of evidence based on facts. Therefore, from tax perspective as well, it is important to make preparations from an early stage of tax audit or administrative review process, anticipating what arguments and verification can be given in the event that this case goes to court. Positive results can be gained by constructing arguments based on legally justified and accurate evidence assessment while maintaining consistency throughout the whole process from tax audit, administrative review to a lawsuit.
DT Legal Japan, as a law professional, supports companies from early stages of tax audit or administrative review process in collaboration with tax accountants, the tax specialists. This enables the provision of highly convenient services and the construction of convincing arguments that are thoroughly consistent with those made in the tax audit and administrative review process.