National Tax Agency, Japan
Mutual Agreement Procedures Report 2022
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 2021 operation year, the NTA received 246 requests, of which 188 were BAPArequests (76% of all requests) and 58 were MAP requests (24% of all requests).
The total number of requests received in the 2021 operation year increased to 133% from the2020 operation year.
(Note) Please see Attachment 1 for the types of cases.

Chart 1: MAP/BAPA requests received
Number of requests received
250

Total
200

219
197

187

195

167
143

150

152
131

100

162
149

246
188

163

148

5652

2018

2019

131

BAPA

185

206
166

151

200

146

112
MAP

50

313645

3844

2011

2012

2013

2014

2015

0(Notes)

123

3140

2016

2017392020

582021

Operation Year

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. In some countries or regions, taxpayers make a request separately withrespect to each taxation year for which an adjustment was made. In addition, under the tax
reform of fiscal 2020, the consolidated tax return filing system was abolished and replacedwith the group aggregation system. Following this change, the procedures for requesting aMAP/BAPA have been changed since 14 February 2022. Counting such requests
collectively, the total number of requests received in the 2021 operation year was 217.
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 2021 operation year, a total of 186 cases were closed, 130 of which were BAPA cases(70% of all cases closed) and 56 of which were MAP cases (30% of all cases closed).
 The total number of cases closed during the 2021 operation year has increased to 120% fromthe 2020 operation year.
(Note) Please see Attachment 1 for the types of cases.
Chart 2: MAP/BAPA cases closed
Number of cases closed
Total

150

170

157
135

100

129
BAPA

174

141

141
121

171
155

166
146

143

126

186
145

122

186
155
130
122

MAP

50

41

0187

22
2011

2012

2033
2013

2014

29
2015

4141

2017

2018

2019

28
2016

5644

33
2020

2021Operation Year(Note)

When applying the same counting method as note 2 in section1, the number of cases
closed during the 2021 operation year is 176.

2.2 Average time to close a MAP/BAPA caseThe average time to close all cases in the 2021 operation year was 31.6 months (30.3 monthsin the 2020 operation year).
The average time to close a BAPA case was 31.6 months (29.2 months in the 2020 operationyear) and the average time to close a MAP case was 31.5 months (34.4 months in the 2020
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 2021 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
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0

MAP

632

BAPA
496

359
70

356
65

379
77

425
95

465

456
113

343

2016

289

291

302

330

355

2011

2012

2013

2014

2015

542

528

143

141

124

135

387

404

407

431

2017

2018

2019

2020

109

110

572

489

2021

Operation Year(Note)

When applying the same counting method as note 2 in section1, the number of cases in theinventory at the end of the 2021 operation year is 556.

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 2021 operation year.
In the year-end inventory of the 2021 operation year, cases with the United States (20%) are themost, followed by China (16%), India (14%), Korea (9%), and Germany (7%).
(Note) Please see Attachment 2 for the list of countries and regions with which the NTA has
inventory at the end of the 2021 operation year.
Chart 4: Year-End Inventory by region

Number400351

350

MAPBAPA

91300
250200150

138

100850130

1432604499

0The Americas

Asia/Oceania

3Europe/Africa

National Tax Agency, Japan
4. Cases with non-OECD economies
4.1 The number of MAP/BAPA cases○ In the 2021 operation year, as for the MAP/BAPA cases with non-OECD economies, 76 requests
were received and 59 cases were closed.
○ The number of MAP/BAPA cases with non-OECD economies in the year-end inventory was 273,
accounting for 43% of all cases.
Chart 5:
Requests received
NumberNumber9080895576

Total

71

BAPA 4543706050

Cases closed

44413531MAP

2825234230

23222920211527

75959

BAPA

3432

10Total
4445

44

2076

49

4030

54

33
26

MAP

50
2017

2018

2019

2017

2020
2021
Operation Year

2018

2019

2020
2021
Operation Year

Year-End Inventory
Number
300

MAP

250
200
150

BAPA

200

256

98

83

159

173

189

146

2018

2019

2020

2021

99

84

76

100
50273

257

245

124

0
2017

Operation Year

4.2 Average time to close a case with non-OECD economies


The average time to close all cases with non-OECD economies in the 2021 operation year was44.0 months (43.2 months in the 2020 operation year).
The average time to close BAPA case with non-OECD economies was 43.5 months (42.8 monthsin the 2020 operation year) and the average time to close a MAP case with non-OECD economies
was 44.6 months (43.5months in the 2020 operation year).

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

Pricing

Others

Total

Adjustment

201920202021（Notes） 1

Requests Received

148

448200Cases Closed

145

365186Year-End Inventory

407

11916542

Requests Received

146345185

Cases Closed

122303155

Year-End Inventory

431

123

18572

Requests Received

188

499246

Cases Closed

1304214186

Year-End Inventory

489

130

13632

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.

3Requests for compensating adjustments or amendments with respect topreviously agreed APAs are included in the requests received in the operationyear when such requests were made.
The number of “Cases Closed” includes cases in which requests are withdrawn
by taxpayers as well as cases resolved through agreements with treaty partners.

45“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 2021 operation year

Europe/Africa

Asia/Oceania

The Americas

Total(OECD countries)
Belgium
FinlandFranceGermany
Ireland
Italy
LuxembourgNetherlands
Portugal
Spain
SwedenSwitzerland
United Kingdom

Australia
Korea
New Zealand

CanadaMexicoUnited States

19 countries(Non-OECD economies)
Republic of South Africa
Romania

15 countries

China
Hong Kong
India
Indonesia
Malaysia
Singapore
TaiwanThailand
Vietnam12 countries/ regions6

11 countries/ regions

3 countries

30 countries/ regionsNational Tax Agency, Japan(Attachment 3)
Types of cases closed during the 2021 operation year
Industry

Manufacturing
Wholesale/RetailOthers
Total

125
38
23186

(67%)
(20%)
(13%)
(100.0%)

A: Manufacturing (consumer electric equipment, instruments, and bulbs)
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(Notes)1. The sum of the numbers in the chart above does not correspond to the total number of cases
closed. Some cases are counted for each type of transaction when multiple transaction types arecovered.
2. Requests for compensating adjustments or amendments with respect to previously agreed APAs
are counted as the same transaction in the original APA agreement.
7

National Tax Agency, Japan

Transfer pricing method(Notes)
1. The sum of the numbers in the chart above does not correspond to the total number of cases
closed. Some cases are counted for each transfer pricing method when multiple methods areapplied.
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 that are provided in tax treaties. The NTA enters into MAP when taxpayers consider thatinternational double taxation arises or will arise from transfer pricing adjustments or others, or whentaxpayers request Bilateral Advance Pricing Arrangements (BAPAs).
(Note 1)
76 tax treaties that Japan has concluded (which cover 84 countries/regions at the end of the 2021
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 administration
confirms in advance a set of criteria such as methods, comparables, adjustments to it, and criticalassumptions 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 administration will refrainfrom adjusting the transfer pricing set by the taxpayer if it files its tax return in accordance with theconfirmed APA conditions for the years covered by the APA.

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