“Consideration requirement” for triangular reorganization transactions relaxed

Japan Inbound Tax & Legal Newsletter November 2019, No.46

Japan’s 2019 Tax Reform Act and the related enforcement orders and regulations were published on 29 March 2019. Most of the rules are effective for taxable years beginning on or after 1 April 2019, and several of the provisions are likely to impact inbound M&A transactions.

This article analyzes the reform’s relaxation of the “consideration requirement” for triangular reorganization transactions (i.e. reorganizations using shares in a direct and/or indirect parent as consideration) associated with mergers, demergers and share-for-share exchanges.
This newsletter explains these topics;

1. General tax treatment of reorganizations

2. Pre and post-reform tax treatment

3. Potential impact on inbound transactions

(163KB, PDF)

* This Article is based on the relevant Japanese or specific country’s tax law and other authorities in effect on the date of this Article. This Article would not be guaranteed updating if there are any changes in Japanese tax law, any other law, or interpretations by the courts or tax authorities thereof after the date of this Article.

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