National Tax Agency, Japan
Mutual Agreement Procedures Report 2023
When international double taxation arises from transfer pricing adjustments or other issues, the National
Tax Agency (“NTA”) enters into Mutual Agreement Procedures (“MAP”) with relevant foreign tax
authorities under the provisions of applicable tax treaties to resolve such double taxation upon requestfrom taxpayers. The NTA also enters into Bilateral Advance Pricing Arrangements (“BAPA”) to ensure
the taxpayers’ predictability and promote the proper and smooth administration of transfer pricing taxation.
1. MAP/BAPA requests received

During the 2022 operation year, the NTA received 301 requests, of which 243 were BAPArequests (81% of all requests) and 58 were MAP requests (19% of all requests).
The total number of requests received in the 2022 operation year increased by 22% from the2021 operation year.
(Note) Please see Attachment 1 for the types of cases.

Chart 1: MAP/BAPA requests received
Number of requests received
300
246

Total

250
197
200

167

150
131

100

187

152
149
BAPA

195

206

219

166

163

200

301
243

185

162
151

131

188
148

146

MAP
50
3645

38

44

3140

2012

2013

2014

2015

2016

2017

0565220182019392020

58

58

2021

2022

Operation Year(Notes)

1.
2.

3.

Each operation year runs from 1 July until 30 June in the following year.
The number of requests received is the sum of the number of requests that the NTA
received from taxpayers and the number of requests that the NTA received through foreign
tax authorities. Due to the abolishment of the consolidated tax return filing system underthe 2020 tax reform, the format of MAP/BAPA requests has been changed fromconsolidated basis to an entity basis. The number of the requests after February 2022contains the increased number of requests due to the change of the format of therequests.
MAP requests received include requests related to permanent establishments (PEs) orwithholding taxes as well as transfer pricing adjustment.

1National Tax Agency, Japan
2. MAP/BAPA cases closed
2.1 The number of MAP/BAPA cases closed
During the 2022 operation year, of 191 cases were closed, 146 of which were BAPA cases (76%of all cases closed) and 45 of which were MAP cases (24% of all cases closed).
The total number of cases closed during the 2022 operation year has increased by 3% from the2021 operation year.
(Note) Please see Attachment 1 for the types of cases.

Chart 2: MAP/BAPA cases closed
Number of cases closed
200

187
170

174

141

150

100Total

129

141
BAPA 121

50

171
155

0
2012

33
2013

20

29

28

2014

2015

2016

186

191

155
146

145
122

122

MAP
41

166

143
126

186

44

41

41

2017

2018

2019

130

56
33
2020

2021

146

45
2022

Operation Year
2.2 Average time taken for closing a MAP/BAPA caseThe overall average time taken for closing all cases in the 2022 operation year was 30.2months (31.6 months in the 2021 operation year).
The average time taken for closing a BAPA case was 30.5 months (31.6 months in the 2021
operation year) and the average time taken for closing a MAP case was 29.2 months (31.5months in the 2021 operation year).

2

National Tax Agency, Japan
3. Year-End Inventory
3.1 The number of MAP/BAPA cases in the Year-End Inventory
Since the number of requests received was larger than the number of cases closed, the numberof cases in the inventory at the end of the 2022 operation year increased from the year before.
(Note) Please see Attachment 1 for the types of cases.

Chart 3: Year-End Inventory
Number of Cases in the Year-End Inventory
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0742

MAP

BAPA

632
496

356

379

65

77

425
95

465
110

456
109

528
124

542
135

156

572
143
141

113
586

291

302

330

355

343

2012

2013

2014

2015

2016

387

404

407

431

2017

2018

2019

2020

489

2021

2022

Operation Year

3.2 Region-by-region Inventory

The number of cases with Asia/Oceanian countries accounted for the largest part in the whole
year-end inventory of the 2022 operation year.
In the year-end inventory of the 2022 operation year, cases with the United States (23%) are
the most, followed by India (15%), China (14%), Korea (8%), and Germany (6%).
(Note) Please see Attachment 2 for the list of countries and regions with which the NTA has
inventory at the end of the 2022 operation year.

Chart 4: Year-End Inventory by region
Number
450
400
350
300
250
200
150
100
500407

MAPBAPA1111936296

187
The Americas

14239103

Asia/Oceania
3Europe/Africa

National Tax Agency, Japan
4. Cases with non-OECD economies
4.1 The number of MAP/BAPA cases
In the 2022 operation year, as for the MAP/BAPA cases with non-OECD economies, 101 requests
were received and 39 cases were closed.
The number of MAP/BAPA cases with non-OECD economies in the year-end inventory was 335,accounting for 45% of all cases (742 cases).

Chart:5: MAP/BAPA cases with non-OECD economies
Requests received

Cases closed

Number
110
100
90
80
70
60
50
4030
20
100

Number
10171

BAPA
43

45
4476
Total
4130
20
36

28

727

2019

2020

2021

Total
44

42
39

40

49

34

MAP

50
65

59

59

60

8930

BAPA

242223
29
21

1033

20

26

MAP

1502018

2022

2018

2019

2020

2021

2022

Operation YearOperation Year

Year-End Inventory
NumberMAP

BAPA

335

350
300
250
200273257

256

98

83

146

159

173

189

2018

2019

2020

2021

245
99105

84

150
10050

23002022

Operation Year

4.2 Average time taken for closing a case with non-OECD economies
The overall average time taken for closing all cases with non-OECD economies in the 2022
operation year was 51.3 months (44.0 months in the 2021 operation year).
The average time taken for closing a BAPA case with non-OECD economies was 58.2 months(43.5 months in the 2021 operation year) and the average time taken for closing a MAP casewith non-OECD economies was 40.4 months (44.6 months in the 2021 operation year).

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National Tax Agency, Japan(Attachment 1)
The number of cases in the last three years
TransferOperation YearBAPA

Pricing

Others

Total

Adjustment

2020

2021

2022

（Notes） 1.

Requests Received

146

34

5185

Cases Closed

122

30

3155

Year-End Inventory

431

123

18572

Requests Received

188

49

9246

Cases Closed

1304214186

Year-End Inventory

489

130

13632

Requests Received

243

47

11301

Cases Closed

146369191

Year-End Inventory

586

14115742

Each operation year runs from 1 July until 30 June in the following year.

2.

The number of “Requests Received” is the sum of the number of requests theNTA received from taxpayers and the number of requests the NTA received
through foreign tax authorities.

3.

Requests for compensating adjustments or amendments with respect topreviously agreed APAs are included in the requests received in the operation
year when such requests were made.

4.

The number of “Cases Closed” includes cases in which requests are withdrawn
by taxpayers as well as cases resolved through agreements with treaty partners.

5.

“Others” includes cases related to permanent establishments (PEs) orwithholding taxes.

5National Tax Agency, Japan(Attachment 2)
Countries/regions with which the NTA has inventory
at the end of the 2022 operation year
Europe/Africa

Asia/Oceania

The Americas

Total(OECD countries)
Belgium
Denmark
FinlandFranceGermany
IrelandIsraelItaly
Luxembourg
Netherlands
Spain
SwedenSwitzerland
United Kingdom

Australia
Korea
New Zealand

CanadaMexicoUnited States

20 countries(Non-OECD economies)
Romania

15 countries

China
Hong KongIndia
Indonesia
Malaysia
Singapore
TaiwanThailand
Vietnam12 countries/ regions

610 countries/ regions

3 countries

30 countries/ regionsNational Tax Agency, Japan(Attachment 3)
Types of cases closed during the 2022 operation year
Industry

Others
23

A
11G
20

B
38

C
13F
24

E
40

Manufacturing
Wholesale/RetailOthers
Total

124
44
23
191

(65%)
(23%)
(12%)
(100.0%)D
22

A: Manufacturing (consumer electric equipment and instruments)
B: Manufacturing (transport equipment and instruments)
C: Manufacturing (industrial electric equipment and instruments)
D: Manufacturing (machinery and equipment)
E: Manufacturing (others)
F: Trading (import/export)
G: Other wholesale/retailType of transaction

Intangibles
69
Inventories
145
Services111(Notes)
1. The sum of the numbers in the chart above does not correspond to the total number of cases closed.
This is because some cases are counted for each type of transaction when multiple transaction types
are covered.
2. Requests for compensating adjustments or amendments with respect to previously agreed APAs arecounted as the same transaction in the original APA agreement.
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National Tax Agency, Japan

Transfer pricing method
Comparable
uncontrolled price(CUP) method, 7
Cost plus (CP)method, 7
Profit split (PS)method, 18

Others, 61

Transactional net
margin method(TNMM), 95(Notes)
1. The sum of the numbers in the chart above does not correspond to the total number of cases
closed. This is because some cases are counted for each transfer pricing method when multiple
methods are applied.
2. Requests for compensating adjustments or amendments with respect to previously agreed APAs
are counted as the same transfer pricing method applied in the original APA agreement.

8National Tax Agency, Japan(Reference)
Terminologies

Mutual Agreement Procedures (MAP) are a formalized set of procedures between treaty partners’ tax
authorities pursuant to the provisions of tax treaties. The NTA enters into MAP when taxpayers consider
that international double taxation arises or will arise from transfer pricing adjustments or others, orwhen taxpayers request Bilateral Advance Pricing Arrangements (BAPAs).
(Note 1)77 tax treaties that Japan has concluded (which cover 85 countries/regions at the end of the 2022
operation year) contain the provisions of the Mutual Agreement Procedures.
(Note 2)An APA is an arrangement whereby, based on an application from a taxpayer, the tax authority confirms
in advance a set of criteria such as methods, comparables, adjustments to it, and critical assumptions
as to future events for the determination of the transfer pricing for transactions between the taxpayer
and its foreign-related entity/entities over a fixed time. The tax authority will refrain from adjusting thetransfer pricing set by the taxpayer if it files its tax return in accordance with the confirmed APA
conditions for the years covered by the APA.

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