This is an unofficial translation and reference material designed to help you understand the transfer pricing
documentation in Japan; thus, no liability is accepted. To ensure the accuracy, reliability, or current validityof the contents of this translation, please consult the original Japanese texts of laws and regulations.

Outline of the Revision of
the Transfer Pricing Documentation
June 2016
National Tax Agency
Based on the recommendations of OECD's Base Erosion and Profit Shifting (BEPS) Project(Action 13: Guidance on Transfer Pricing Documentation and Country-by-Country Reporting),
the Act on Special Measures Concerning Taxation was partially revised as part of the tax
reform in FY2016, putting the transfer pricing documentation in place as follows:This leaflet outlines principal items in the revision of the transfer pricing documentation .

1. Documents to be prepared by multinational enterprise groups [new] P2-6
All Japanese corporations and foreign corporations with permanent establishments(hereinafterreferred to as "PE") that is a Constituent Entity of a multinational enterprise (MNE) group with a total
consolidated revenue of 100 billion yen or more in the preceding fiscal year (Specified MNE Group)
must submit a Notification for Ultimate Parent Entity, a Country-by-Country Report, and a Master File tothe national tax authorities through the online national tax return filing and tax payment system (e-Tax).
* Details of the filing obligation and reporting entity can be confirmed in the Flow of Submission on
page 2.
This revision applies to the below-listed reports (notifications) for the Ultimate Parent Entity’s fiscal year that begins on April
1, 2016 or thereafter.

<<Three types of documents recommended in the BEPS Project>>(CbC Report)(Master File)(Local File)
Notification
for Ultimate
Parent Entity

Country-byCountry Report○ Information on
Ultimate Parent
Entity○ Information on
country-bycountry
operations

To be submitted by thelast day of the Ultimate
Parent Entity’s fiscal year

Master File○ Information on the entire
business operations of
the Group

Documents considered
as necessary to
calculate arm’s length
prices○ Detailed information to
calculate arm’s length
prices in controlled
transactions

To be submitted within one year of the day following theone when the Ultimate Parent Entity’s fiscal year ends

2. Documents to be prepared by corporations engaged in controlled transactions [revised] P7
Corporations engaged in below-listed transactions with one foreign-related party must prepare or
obtain and store documents considered as necessary to calculate arm’s length prices for the controlled
transactions by the deadline for submission of final returns (so-called duty of contemporaneous
documentation).
(1) Controlled transactions (Note 1) whose total (for the previous business year (Note 2)) is fivebillion yen or more, or(2) Transactions of intangibles (Note 3) whose total (for the previous business year) is 300 million
yen or more
(Note 1) "Controlled transactions" refer to the sale or purchase of assets, the provision of services, and othertransactions conducted by corporations with foreign-related parties.
(Note 2) If there is no previous business year, the current business year shall apply.
(Note 3) Transactions of intangibles refer to the transfer or lending of intangible fixed assets such as patent rights,
utility model rights and other intangible assets.
This revision applies to corporation tax for the business year that begins on April 1, 2017 or thereafter.

* For explanations about terms, etc. refer to page 8 and thereafter.

1. Documents to be prepared by MNE Groups [new](1) Duty to submit a Notification for Ultimate Parent Entity, a Country-by-Country Report, anda Master File
Whether corporations have the duty to submit a Notification for Ultimate Parent Entity, aCountry-by-Country Report, and a Master File in Japan and what corporations must do so can be confirm
in the following flow of submission.

Does the corporate group to which you belong fall into the category of enterprisegroups? (See page 8)

Yes
Does the enterprise group to which you belong fall into the category of MNE Groups?
(See page 8)

No

No

Yes
Does the MNE Group to which you belong fall into the category of Specified MNEGroups? (See page 9)No

Yes
Do you fall into the category of Constituent Entities? (See page 9)

You have no duty ofsubmission.

[Step 1] Duty of submission

No

Yes

Confirm [Step 2] because you have the duty to submit the documents.

[Step 2] Reporting entities to submit reports (notifications)
Confirm which of the two cases specified below applies to the Specified MNE Group to which
you belong.
If the Ultimate Parent Entity (or Surrogate Parent Entity) is
located in a foreign country

If the Ultimate Parent Entity (or Surrogate Parent Entity) is
located in Japan

Japan Foreign country(1) Ultimate Parent Entity
(2)

(4)

(or Surrogate Parent
Entity)Japanese
corporation

Japan Foreign country
Japanese
corporation

Foreigncorporation(3) PE

Ultimate Parent Entity(or Surrogate Parent
Entity)(5) PE※PE：Permanent Establishment

The table below uses circles to indicate reports (notifications) corporations must submit
depending on which of the five types of cases numbered (1) to (5) applies to you. Confirm theoutline of each report (notification) in the corresponding page.

Reports(notifications)
In principle

Notification for
Ultimate Parent Entity

Exception

(1)

(2)

(3)







In principle (One representative
company)

Exception

(4)

(5)





 (One representative
company)

Corresponding
page

Page 3《Direct Filing》
In principle

Country-by-Country
ReportIn principle



Exception
《Local Filing》

In principle

In principle



Exception

(One representative
company)

Master File

In principle-2-

Exception

Page 4(One representative
company)(One representative
company)

Page 6

(2) Outline of the Notification for Ultimate Parent Entity
Japanese corporations or foreign corporations with PE that is a Constituent entity of a Specified MNEGroup must submit a Notification for Ultimate Parent Entity, which includes information on the Ultimate
Parent Entity and Surrogate Parent Entity, to the competent District Director via e-Tax by the day when thefiscal year covered by the Notification ends (Article 66.4.4 Paragraph 5 of the Act on Special Measures
Concerning Taxation (hereinafter referred to as the "Act")).
In principle, if there are several Japanese corporations and foreign corporations with PE that must submit
a Notification for Ultimate Parent Entity, all of them have the duty to do so. But as an exception, if one of
the corporations submits information (Note) on those which it represents when it submits a Notification for
Ultimate Parent Entity to the competent District Director via e-Tax by the day when the fiscal year coveredby the Notification ends, the other corporations do not need to submit a Notification for Ultimate Parent
Entity (Article 66.4.4 Paragraph 6 of the Act).
(Note) The major content of the information to be submitted is as follows (Article 22.10.4 Paragraph 10 of the Ordinance for
Enforcement of the Act on Special Measures Concerning Taxation (hereinafter referred to as the "Ordinance")):• Name of the corporation that submits a Notification for Ultimate Parent Entity on behalf of others, the location of its head andother offices, its corporate number, the name of its representative, etc.
• Names of corporations other than the one that submits a Notification for Ultimate Parent Entity on behalf of others, the locationof their head and other offices, their corporate numbers, the names of their representative, etc.

National tax authorities

Notification for
Ultimate Parent
EntityNotification for
Ultimate Parent
EntityNotification for
Ultimate Parent
Entity Information on the name of
the corporation that submits a
Notification for Ultimate Parent
Entity on behalf of the Group
Items related to
exception

 Deadline for submission: Day
when the fiscal year coveredby the Notification ends
 Method of submission: e-Tax

Japan
PE

Japanese
corporation

Japanese
corporation

Foreign country

Foreigncorporation<< Specified MNE Group >>[Outline of the Notification for Ultimate Parent Entity]
Reporting entity tosubmit it

Japanese corporations or foreign corporations with PE that is a Constituent Entityof a Specified MNE Group(1) Name of the Ultimate or Surrogate Parent Entity, (2) the location of its head or
principal office (if the Ultimate Parent Entity resides in a foreign country, theItems to be notified

location of its head or principal office or the site where its business is managed orcontrolled), (3) its corporate number, and (4) the name of its representative (Article
22.10.4 Paragraph 9 of the Ordinance)

Format of
notification

http://www.nta.go.jp/taxes/tetsuzuki/shinsei/annai/hojin/annai/1607-4.htm（Japanese）

Deadline forsubmission

To be submitted to the competent District Director via e-Tax by the day when the
Ultimate Parent Entity's fiscal year ends
* This deadline is earlier than those for the Country-by-Country Report and theMaster File.

Exemption from theduty of submission

MNE Groups with a total consolidated revenue for the Ultimate Parent Entity's
preceding fiscal year of less than 100 billion yen

Start of application

Ultimate Parent Entity's fiscal year that begins on April 1, 2016 or thereafter-3-(3) Outline of the Country-by-Country (CbC) Report
If the Ultimate or Surrogate Parent Entity is located in Japan <Direct Filing>

Japanese corporations that is a Constituent Entity of a Specified MNE Group (limited to those which fall
into the category of Ultimate or Surrogate Parent Entities) must submit a Country-by-Country (CbC)
Report to the competent
Foreign tax
Japan’s tax authorities
District Director via e-Tax
authorities(exchange of information)
within one year of the day
following the one when the Deadline for submission: Within one year of the day
following the one when the fiscal year covered by thefiscal year covered by theReport ends
Report ends (Article 66.4.4
CbC Report Method of submission: e-Tax
Paragraph 1 of the Act).
 Language: English
In this case, the CbC Report
is transmitted to the tax
Foreign countryJapan
authorities in the country where Ultimate Parent Entity
the Constituent Entity resides
 Surrogate Parent Entity
according to the informationexchange system based on tax
JapaneseJapanese
ForeignPE
corporation
corporation
corporation
treaties (This method is called"Direct Filing").
<<Specified MNE Group>>
If the Ultimate and Surrogate Parent Entities are located in a foreign country <In principle, Direct
Filing> <Exception: Local Filing><In principle: Direct Filing>
Japan Foreign country(3) There is a systemic f ailure(Authorities in the country or territory designated by the(Signatory to the tax
Commissioner of the National Tax Agency
treaty, etc.)
In principle, if their
Ultimate and Surrogate Parent
Japan's tax authorities
Foreign tax authorities
Entities are located in aforeign country, Japanese(2) There is no qualif ying competent authority agreement
corporations and foreign
CbC Report
CbC Report
corporations with PE that is a(1) No measure is taken
to request submission ofConstituent Entity of a
the Report
Specified MNE Group do not Japanese corporation
have the duty to submit a
 Ultimate Parent Entity
 PE
 Surrogate Parent Entity
CbC Report because the<<Specified MNE Group>>
information equivalent to the
CbC Report submitted by the Ultimate or Surrogate Parent Entity to the tax authorities in the country where
it resides is transmitted by the tax authorities to the national tax authorities in Japan.
<Exception: Local Filing>
As an exception, if one of the cases (1) to (3) applies where the tax authorities in the country in which
their Ultimate Parent Entity (Surrogate Parent Entity if appointed by the Ultimate Parent Entity) resides are
considered as unable to transmit the information equivalent to the CbC Report to Japan, Japanese
corporations or foreign corporations with PE that is a Constituent Entity of a Specified MNE Group(excluding those which fall into the category of Ultimate or Surrogate Parent Entities) must submit a CbC
Report to the competent District Director via e-Tax within one year of the day when the fiscal year coveredby the Report ends (This method is call "Local Filing") (Article 66.4.4 Paragraph 2 of the Act and Article
39.12.4 Paragraph 1 of the Order for Enforcement of the Act on Special Measures Concerning Taxation(hereinafter referred to as the "Order").
(No environment is established for exchange of information)

(1)

(2)
(3)

If the country (limited to signatories to the tax treaties; this applies to (2) and (3)) in which the Ultimate Parent Entity (Surrogate
Parent Entity if appointed by the Ultimate Parent Entity; this applies to (2) and (3)) has not taken necessary measures to require
the Entity to submit items equivalent to the CbC Report for the Ultimate Parent Entity's fiscal year
If there is no Qualifying Competent Authority Agreement (Note) between the Japanese Minister of Finance and the competentauthorities in the country in which the Ultimate Parent Entity resides
If the country in which the Ultimate Parent Entity resides is designated by the Commissioner of the National Tax Agency as oneof the countries or territories that are considered as unable to provide Japan with information equivalent to the CbC Report as
required in Japan on the day when the Ultimate Parent Entity's fiscal year ends (excluding cases in which there is no Competent
Authority Agreement (Note))(Note) The "Qualifying Competent Authority Agreement" is an agreement concluded between the Japanese Minister of Finance and the competentauthorities in a country or territory other than Japan on the method of mutually exchanging CbC Reports or information equivalent (Competent Authority
Agreement) thereto which is actually valid on the day when one year passes from the day following the one when the Ultimate Parent Entity's fiscal year
ends.
Even if case (1) or (2) above applies, the Japanese corporations(excluding those which fall into the category of Ultimate or Surrogate Parent Entities) andforeign corporations with PE do not need to submit a CbC Report for the Ultimate Parent Entity's fiscal year that begins between April 1, 2016 and March
31, 2017 as required in Local Filing.

-4-In this case, if there are several Japanese corporations and foreign corporations with PE that must
submit a CbC Report, Local Filing in principle requires all of them to submit a CbC Report. But as an
exception, if one of the Information on the corporation
National tax authorities
that submits a Country-bycorporations
submits
Country Report on behalf ofothersinformation (Note) on the Deadline for submission: Within
one year of the day following thecorporations it represents
Items related to
one when the fiscal year covered
CbC Report
CbC Report
exception
CbC Reportby the Report ends
when it submits a CbC
 Method of submission: e-Tax
Report to the competent
District Director via
Japan Foreign country
e-Tax within one year ofJapaneseJapanesePE Ultimate Parent Entity
the day following the one
corporation
corporation
 Surrogate Parent Entity
when the fiscal year<<Specified MNE Group>>
covered by the Reportends, corporations other than the representative one do not need to submit a CbC Report (Article 66.4.4
Paragraph 3 of the Act).
(Note) The major content of the information to be submitted is as follows (Article 22.10.4 Paragraph 5 of the Ordinance):• Name of the corporation that submits a CbC Report on behalf of others, the location of its head and other offices, its corporate
number, the name of its representative, etc.
• Names of corporations other than the one that submits a CbC Report on behalf of others, the location of their head and otheroffices, their corporate numbers, the names of their representative, etc.

[Outline of the Country-by-Country Report]
Reportingentity tosubmit it

Items to bereported

Format ofreportingDeadline forsubmission
Exemptionfrom theduty ofsubmission<Direct Filing> Japanese corporations that are a Constituent Entity of a Specified MNEGroup (limited to Ultimate or Surrogate Parent Entities)<Local Filing> Japanese corporations or foreign corporations with PE that are a
Constituent Entity of a Specified MNE Group (excluding Ultimate or Surrogate Parent
Entities)
Items to be reported on a tax jurisdiction-by-tax jurisdiction basis where the Constituent
Entities of a Specified MNE Group conduct business are:
(1) Amounts of revenue, profit (loss) before income tax, income tax paid, income tax
accrued, stated capital, accumulated earnings, and tangible assets other than cash
and cash equivalents, as well as the number of employees(2) Names, Tax jurisdiction of organization or incorporation if different from tax
jurisdiction of residence, and major business activity(ies) of the Constituent
Entities(3) Items that are deemed as useful for those listed above(Article 22.10.4 Paragraph 1 of the Ordinance)
http://www.nta.go.jp/taxes/tetsuzuki/shinsei/annai/hojin/annai/1607-5.htm（Japanese）
To be submitted to the competent District Director via e-Tax within one year of the day
following the one when the Ultimate Parent Entity's fiscal year ends
[Same as for Master Files]

MNE Groups with a consolidated total revenue for the Ultimate Parent Entity's
preceding fiscal year of less than 100 billion yen[Same as for Master Files]

Language

English (Article 22.10.4 Paragraph 4 of the Ordinance)

Penalties

Fine of up to 300,000 yen if corporations fail to submit a CbC Report to the District
Director by the deadline without good reason (Article 66.4.4 Paragraph 7 of the Act)[Same as for Master Files]

Start ofapplication

Ultimate Parent Entity's fiscal year that begins on April 1, 2016 or thereafter[Same as for Master Files]– The data format for a CbC Report is designated! –In the Country-by-Country Report, it is necessary to use XML or CSV format when providing information in certain
forms. Plans call for OECD to publish a schema and user guide for XML and the National Tax Agency to prepare
specifications for CSV and publish them via its website. Prepare a Country-by-Country Report according to thespecifications, etc.

-5-

(4) Outline of the Master File
Japanese corporations or foreign
National tax authorities
corporations with PE that is a
 Deadline for submission: Within one yearof the day following the one when the fiscal
Constituent Entity of a Specified MNEyear covered by the File ends
 Method of submission: e-Tax
Group msut submit a Master File to the
Master File Language: Japanese or English
competent District Director via e-Tax
within one year of the day following theone when the fiscal year covered by theJapan
Foreign country
File ends (Article 66.4.5 Paragraph 1 ofJapanese corporation
ForeignPE
corporation
the Act).
<<Specified MNE Group>>
In principle, if there are several
Japanese corporations or foreign
corporations with PE that must submit a Master File, all of them have the duty to do so. But as an
exception, if one of the
National tax authorities Information on thecorporation that submits acorporations submits information
Master File on behalf ofothers(Note) on the corporations it
 Deadline for submission:
Within one year of the day
represents when it submits a
Items related tofollowing the one when the
Master File
Master Filethe exception
Master Filefiscal year covered by the File
Master File to the competentends
 Method of submission: e-Tax
District Director via e-Tax within
one year of the day following theForeign countryJapan
one when the fiscal year covered
JapaneseJapanese
ForeignPE
corporation
corporation
corporationby the File ends, corporations
other than the representative one<<Specified MNE Group>>
do not need to submit a Master
File (Article 66.4.5 Paragraph 2 of the Act).
(Note) The major content of the information to be submitted is as follows (Article 22.10.5 Paragraph 3 of the Ordinance):• Name of the corporation that submits a Master File on behalf of others, the location of its head and other offices, its corporate
number, the name of its representative, etc.
• Names of corporations other than the one that submits a Master File on behalf of others, the location of their head and otheroffices, their corporate numbers, the names of their representative, etc.

[Outline of the Master File]
Reportingentity tosubmit it

Japanese corporations or foreign corporations with PE that are a Constituent Entity of aSpecified MNE Group

Items to bereported

Organizational structure of the Specified MNE Group as well as the
Page 10
outline of its business operation and financial condition
Other items as listed in the items of Article 22.10.5 Paragraph 1 of the Ordinance

Format ofreporting

http://www.nta.go.jp/taxes/tetsuzuki/shinsei/annai/hojin/annai/1607-6.htm（Japanese）

Deadline forsubmission
Exemptionfrom theduty ofsubmission

To be submitted to the competent District Director via e-Tax within one year of the day
following the one when the Ultimate Parent Entity's fiscal year ends
[Same as for CbC Reports]

MNE Groups with a consolidated total revenue for the Ultimate Parent Entity's preceding
fiscal year of less than 100 billion yen[Same as for CbC Reports]

Language

Japanese or English (Article 22.10.5 Paragraph 2 of the Ordinance) (Note)

Penalties

Fine of up to 300,000 yen if corporations fail to submit a Master File to the District
Director by the deadline without good reason (Article 66.4.5 Paragraph 3 of the Act)[Same as for CbC Reports]

Start ofapplication

Ultimate Parent Entity's fiscal year that begins on April 1, 2016 or thereafter[Same as for CbC Reports](Note) If the corporation submits a Master File in English, it may be requested to submit its Japanese translation as required.

-6-

2. Documents to be prepared by corporations engaged in controlled transactions [revised]
Outline of documents (Local File) considered as necessary to calculate Arm’s Length Prices
Corporations engaged in Controlled Transactions must prepare or obtain and store documents considered asnecessary to calculate Arm's Length Prices for the Controlled Transactions (including electromagnetic
records; hereinafter referred to as the "Local File") by the deadline for submission of final returns(hereinafter referred to as the "Duty of Contemporaneous Documentation") (Article 66.4 Paragraph 6 of theAct).
[Outline of the Local File]
Person who has theduty of preparation
Deadline forpreparation
Documents to beprepared
Period and place ofstorage

Exemption fromthe duty ofContemporaneousDocumentation

Deadline forsubmission(Note 3)

Deadline for submission of final returns
Documents considered as necessary to calculate Arm's Length Prices (ALP)(Documents as listed in the items of Article 22.10 Paragraph 1 of the
Page 11
Ordinance)
In principle, these documents must be stored in Japanese offices of corporations
engaged in Controlled Transactions for seven years from the day the follows thedeadline for submission of final returns (Article 22.10 Paragraph 2 of the Ordinance)(Note 1).
In the cases listed below, corporations are exempted from the duty ofcontemporaneous documentation for Controlled Transactions with one
foreign-related party during the current business year (Note 2).
(1) If the amount of transactions (total of receipts and payments) with theforeign-related party during the previous business year (the current business year
if there was not the previous one) was less than five billion yen, and(2) If the amount of transactions of intangibles (total of receipts and payments) withthe foreign-related party during the previous business year (the current businessyear if there was not the previous one) was less than 300 million yen
Certain appointed day that comes after the day when a request for presentation or
submission is made during the tax examination (Refer to the column below)* If the Local File is not presented or submitted by a certain appointed date, the tax authorities can impose
tax by estimation and inspect persons engaged in similar businesses by asking questions.

LanguageStart of application(Note 1)
(Note 2)

Corporations engaged in Controlled Transactions

Not designated (Note 3)
Business year that begins on April 1, 2017 or thereafter

If the original copy of the File is available in Japan, it must be stored. If it is available outside Japan, its copy must be stored.
Even if Controlled Transactions are exempted from contemporaneous documentation (hereinafter referred to as "Transactions
exempted from CD"), they are subject to transfer pricing taxation, and therefore, the tax authorities may request corporations
to present or submit a Local File in the course of tax examination.
If the File is prepared in a non-Japanese language, the tax authorities may request corporations to submit its Japanesetranslation as required.

– Deadline for submission of documents to be prepared by corporations engaged in Controlled Transactions(including the Local File) –The deadline for submission of documents varies depending on whether or not transactions covered by them requirecontemporaneous documentation (CD) as shown below.
If transactions require CD

If transactions are exempted from CD

Documents considered as necessary to calculate
arm’s length prices (ALP)(Local File)

Documents considered as important to calculate ALP(Documents equivalent to the Local File)

By the day designated by the tax examiner whichcomes within 45 days*

By the day designated by the tax examiner which comes
within 60 days*

Documents considered as important to calculate ALP• Documents including items that provide the basis for what is• Documents including items that provide the basis for what is written

written in the Local Filein the Local File• Documents including items related to what is written in the Local
File• Other documents considered as important when calculating ALP• Documents including items related to what is written in the Local

By the day designated by the tax examiner which comes
within 60 days*

By the day designated by the tax examiner which comes
within 60 days*

File• Other documents considered as important when calculating ALP* The tax examiner designates the day taking into consideration the number of days usually required for preparation of
documents (Prior to the revision, the phrase "without delay" was used.)
The range of documents listed above is largely the same as that of "documents considered as necessary to calculate ALP," a pre-revision
requirement for application of taxation by estimation.

-7-

Reference: Explanations about terms
 "Enterprise group" (Article 66.4.4 Paragraph 4 Item 1 of the Act and Article 39.12.4 Paragraph 2 of
the Order)
Enterprise groups include the following: Those of corporate groups for which consolidated financial statements are compiled, excluding thoselisted below(1) Corporate group if the assets and profits/losses of the company that controls it (Note) is included in
the consolidated financial statements for another corporate group <Corporate group (B) in Figure
1>(2) Corporate group if the assets and profits/losses of the company that controls it is included in the
consolidated financial statements that would be compiled if shares in the company that controls
another corporate group obtained a listing on a financial instruments exchange or similar<Corporate group (E) in Figure 2>
 Those of corporate groups for which consolidated financial statements would be compiled if shares in
the company that controls it obtained a listing on a financial instruments exchange or similar, excluding
those listed below(1) Corporate group if the assets and profits/losses of the company that controls it is included in the
consolidated financial statements for another corporate group <Corporate group (C) in Figure 1>(2) Corporate group if the assets and profits/losses of the company that controls it is included in the
consolidated financial statements that would be compiled if shares in the company that controls
another corporate group obtained a listing on a financial instruments exchange or similar<Corporate group (F) in Figure 2>(Note) The company that controls an corporate group refers to one of the companies in the group that has a majority of voting rights
at other companies in the group on its own account, controls for other reasons the organ of other companies in the group that
decides their financial, operating, and business policy (parent company), and does not have its parent company in the group.

[Figure 1][Figure 2]<<Corporate group (A) (Enterprise group)>>
Consolidated
financialstatements

Company A(Listed)Consolidated
financialstatements

Company D(Unlisted)
These statements will becompiled if the company's
shares obtain a listing

Consolidated
financialstatements

Consolidated
financialstatements

Company B(Listed)Company<< Corporate group (D) (Enterprise group) >>Company

Consolidated
financialstatements

Consolidated
financialstatements

Company C(Unlisted)

Company<<Corporate group (B)>>

These statements will becompiled if the company's
shares obtain a listing

Company E(Listed)Company

Company<<Corporate group (C)>>Company<<Corporate group (E)>>

Company F(Unlisted)

Company

Company<<Corporate group (F)>>In Figures 1 and 2, Corporate groups (A) and (D) fall into the category of enterprise groups.

 "Multinational Enterprise (MNE) Group" (Article 66.4.4 Paragraph 4 Item 2 of the Act and Article
39.12.4 Paragraph 3 of the Order)
MNE Groups include the following enterprise groups:
 Enterprise groups whose Constituent Entities reside in two countries or more [Figure 1]
 Enterprises groups whose Constituent Entities all reside in the same country but have PE in countries or
territories other than the country of residence and pay in the countries or territories corporate tax orsimilar levied on income that arises from businesses conducted through such establishments [Figure 2][Figure 1][Figure 2]
Consolidated
financialstatements

Country A

Country A
Corporation 1

Country B

Consolidated
financialstatements

Country A
Corporation 1

Country B
Corporation 2<<MNE Group>>Country A

Taxation

Country A
Corporation 2<<MNE Group>>-8-Country B

Country B
Branch "Specified MNE Group" (Article 66.4.4 Paragraph 4 Item 3 of the Act)
Those of MNE Groups whose total revenue (Note) for the Ultimate Parent Entity's preceding fiscal year
amounts to 100 billion yen or more fall into the category of Specified MNE Groups.
(Note) The total revenue refers to the sum of sales, revenues, and other incomes in the consolidated financial statements of the MNEGroup (If consolidated financial statements are not available, it refers to the amount equivalent to the sum calculated based on
documents that represent the status of assets and profits/losses of the MNE Group) (Article 22.10.4 Paragraph 7 of theOrdinance).

 "Constituent Entity" (Article 66.4.4 Paragraph 4 Item 4 of the Act, Article 39.12.4 Paragraph 4 of theOrder, and Article 22.10.4 Paragraph 8 of the Ordinance)
Constituent Entities include the following: Companies in a enterprise group whose assets and profits/losses are included in the group's consolidated
financial statements
 Companies in a enterprise group that are excluded from consolidated accounting in the group's
consolidated financial statements of
 Companies excluded from consolidated accounting because of their importance Companies in a enterprise group whose assets and profits/losses would be included in the consolidated
financial statements that will be compiled if shares in the company that controls the group (Note)obtained a listing on a financial instruments exchange or similar Companies in a enterprise group that would be excluded from consolidated accounting in the group's
consolidated financial statements that would be compiled if shares in the company that controls thegroup obtained a listing on a financial instruments exchange or similar Companies excluded from consolidated accounting because of their importance(Note) The company that controls an enterprise group refers to one of the companies in the group that holds a majority of voting
rights at other companies in the group on its own account, controls for other reasons the organ of other companies in the groupthat decides their financial, operating, and business policy (parent company), and does not have its parent company in thegroup.

 "Ultimate

Parent Entity" (Article<<Enterprise Group>>
66.4.4 Paragraph 4 Item 5 of the Act andConsolidated
Article 39.12.4 Paragraph 5 of the
Ultimate Parent
financial
Entitystatements
Order)
Ultimate Parent Entities include theConstituent
Constituent
following:
EntityEntity One of the Constituent Entities in a
10%30%
enterprise group that holds a
Constituent
Constituent
majority of voting rights at other
EntityEntityCompany
Company
Constituent Entities in the group on
Affiliated company
100%
its own account, controls for other
Companies that are excluded from theConstituent
reasons the organ of otherscope of consolidated accounting due
Entity: Scope of consolidated
to importance in terms of scale (suchConstituent Entities that decides
accounting
as assets and net sales) fall into the
Non-consolidated subsidiary
category of Constituent Entities
their financial, operating, andbusiness policy (parent company),
and does not have its parent company in the group "Surrogate Parent Entity" (Article 66.4.4 Paragraph 4 Item 6 of the Act)One of the Constituent Entities other than the Ultimate Parent Entity in a Specified MNE Group that isdesignated by the Ultimate Parent Entity as an entity that submits a Country-by-Country Report or items
equivalent to the Report to the tax authorities in the country where the Constituent Entity resides (limited tocountries or territories other than the country where the Ultimate Parent Entity resides)

 "Ultimate Parent Entity's fiscal year" (Article 66.4.4 Paragraph 4 Item 7 of the Act)The Ultimate Parent Entity's fiscal year refers to a unit of period the Ultimate Parent Entity uses to calculate
its assets and profits/losses.

 "Country of residence" (Article 66.4.4 Paragraph 4 Item 8 of the Act)The country of residence refers to the country or territory determined according to the categories ofcompanies shown below.
(1) Companies that are stipulated by the laws and ordinances of a foreign country as ones on
which tax equivalent to corporate tax shall be imposed because in the country they have theirhead office, principal offices, or sites where their business is managed and controlled andbecause they have similar sites there (excluding those defined in (3))(2) Companies with their head office or principal offices in a foreign country (excluding thosedefined in (1))(3) Companies with their head office or principal offices in Japan-9-

Foreign country
concerned
Foreign country
concernedJapan Items of the Master File
Article 22.10.5 Paragraph 1 of the Ordinance (excerpts)
Item 1: Names of Constituent Entities of the Specified MNE Group, the location of their head office or principal offices,
and a chart illustrating the relationships between the Constituent Entities
Item 2: General description of business of Constituent Entities of the Specified MNE Group, including the following:(a) Sales, income, and other important sources of profit of Constituent Entities of the Specified MNE Group(b) Outline of the supply chain for the Specified MNE Group's five major goods, products or services (whichrefer to the succession of logistic processes that lead up to consumers; this also applies to (c)) as well as ofgeographical markets in which such goods, products or services are provided(c) Outline of the supply chain for the Specified MNE Group's goods, products or services that represent 5%of total sales, revenues, or profits in its category or more as well as of geographical markets in which such
goods, products and services are provided (excluding the items listed in (b))(d) List of important agreements on the provision of services between Constituent Entities of the Specified
MNE (excluding those related to research and development; this also applies to (d)) and the outline of theagreements (including the outline of policy to set the amount of compensation for the provision of services,that of policy to share the amount of expenses for the provision of services, and that of the functions ofmajor bases where services are provided)(e) Outline of the major functions fulfilled by Constituent Entities of the Specified MNE Group when creating
value added, serious risks assumed by them (possible increases or decreases in profit or loss due to factors
such as fluctuations in exchange markets and market interest rates and changes in economic situations),
and major roles played by Constituent Entities when creating important assets to be used and other types ofvalue added(f) Outline of important business mergers, splits, transfers, and other acts involving Constituent Entities of theSpecified MNE Group
Item 3: Outline of the Specified MNE Group's comprehensive strategy for research and development, ownership, anduse of its intangible fixed assets and other intangible assets (hereinafter referred to as "Intangibles" in sections
up to Item 7 below) and the location of major facilities used for research and development of Intangibles andthat of sites where such research and development are managed
Item 4: List of important Intangibles used for transactions between Constituent Entities of the Specified MNE Groupand of Constituent Entities that possess the Intangibles
Item 5: List of important agreements between Constituent Entities of the Specified MNE Group on the sharing ofexpenses related to research and development of Intangibles, a list of important agreements on the provision ofservices for major research and development projects for the Intangibles, a list of important agreements onconsent to use of the Intangibles, and a list of other important agreements on Intangibles between Constituent
Entities
Item 6: Outline of policy to set the amount of compensation for transactions related to R&D and Intangibles between
Constituent Entities of the Specified MNE Group
Item 7: Names of Constituent Entities of the Specified MNE Group which are involved in the transfer of important
Intangibles (including equity for the Intangibles; this also applies to the rest of this item) between them, thelocation of their head office or principal offices, and the content of the Intangibles transferred, the amount ofcompensation, and other details of the transfer between the Constituent Entities
Item 8: Outline of methods for Constituent Entities of the Specified MNE Group to procure funds (including the outlineof important agreements on fund procurement from entities other than the Constituent Entities)
Item 9: Names of those of Constituent Entities of the Specified MNE Group which fulfill pivotal financial functions in
the group and the location of their head office or principal offices (including the name of the country or territory
where laws and ordinances that govern the establishment of the Constituent Entities are enacted and that of thecountry or territory where sites are located in which their business is managed and controlled)
Item 10: Outline of policy to set the amount of compensation for financing between Constituent Entities of the Specified
MNE Group
Item 11: Profits/losses and financial condition included in the consolidated financial statements of the Specified MNEGroup (documents stating the profits/losses and financial condition of the Specified MNE Group if consolidated
financial statements are not available)
Item 12: Outline of arrangement for the method to calculate the amount of compensation for transactions between
Constituent Entities of the Specified MNE Group that reside in different countries and other items related to theallocation of income between such Constituent Entities if such arrangement is made only by the competentauthorities in the country where one of the Constituent Entities resides
Item 13: Items that are useful for those listed in the Items above-10- Documents in the Local File
Article 22.10 Paragraph 1 of the Ordinance (excerpts)
Item 1:Documents describing the content of controlled transactions as stipulated in Article 66.4 Paragraph 1 of the Act (hereinafterreferred to as "Controlled Transactions" in this paragraph), including the following:(a) Documents describing details of assets and the content of services related to the Controlled Transactions(b) Documents describing items related to the functions fulfilled by corporations as stipulated in Article 66.4 Paragraph 1 of
the Act and foreign-related parties related thereto (which refer to foreign-related parties as stipulated in the same
paragraph; this also applies to the rest of this paragraph) in the Controlled Transactions and risks (which refer to possible
increases or decreases in the profits or loss of the Controlled Transactions due to fluctuations in exchange markets andmarket interest rates, changes in economic situations, and other factors; this also applies to the rest of this paragraph)assumed by the corporations and the foreign-related parties in the Controlled Transactions (If, due to the restructuring of
the corporations' or foreign-related parties' business (which refers to mergers, splits, transfer of businesses or importantbusiness assets, and changes in business structure for other reasons; this also applies to the rest of (b)), a change takes
place to the functions fulfilled by the corporations or the foreign-related parties in the Controlled Transactions or the risks
assumed by the corporations or the foreign-related parties in the Controlled Transactions, the documents msut include a
description of the content of the business restructuring and that of changes in the functions and the risks)(c) Documents describing the content of intangible fixed assets and other intangible assets used by corporations as stipulated
in Article 66.4 Paragraph 1 of the Act or foreign-related parties related thereto in the Controlled Transactions(d) Agreements related to, or documents describing the content of agreements on, the Controlled Transactions(e) Documents describing details of the amount of compensation received or paid by corporations as stipulated in Article 66.4
Paragraph 1 of the Act from or to foreign-related parties related thereto in the Controlled transactions, the method to set
the amount of compensation received or paid, and the content of negotiations about such setting, as well as documents
describing the method to calculate arm's length prices (which refer to those stipulated in the same paragraph; this also
applies to the rest of this article) for the amount of compensation received or paid and the content of arrangement of items
related to the Controlled transactions (including other transactions closely related thereto) if such arrangement is made by
the competent authorities in countries or territories other than Japan (excluding cases in which such arrangement is madeby the regional commissioner of the regional taxation bureau or the district director who has jurisdiction over the place
where the corporations pay income tax)(f) Documents describing details of profits/losses for corporations as stipulated in Article 66.4 Paragraph 1 of the Act andforeign-related parties related thereto in the Controlled Transactions and the process in which the amount of profits/losses
is calculated(g) Documents describing analyses of markets (including analyses of the effects of the characteristics of the markets on theamount of compensation and profits/losses in the Controlled Transactions) related to the sale or purchase of assets, theprovision of services, and other transactions in the Controlled Transactions and other items related to the markets(h) Documents describing the content of business, business policy, and organizational structure of corporations as stipulated
in Article 66.4 Paragraph 1 of the Act and foreign-related parties related thereto(i) Documents describing whether there are other transactions closely related to the Controlled Transactions as well as thecontent of the transactions and the circumstances under which the transactions are closely related to the Controlled
Transactions

Item 2:Documents for corporations as stipulated in Article 66.4 Paragraph 1 of the Act to calculate arm's length prices for Controlled
Transactions, including the following:(a) Documents describing the calculation method stipulated in Article 66.4 Paragraph 2 of the Act which is selected by the
corporations, important prior conditions for such selection, and the reasons for such selection as well as other documents
prepared by the corporations to calculate arm's length prices (excluding those listed in (b) to (e) below)(b) Documents describing items related to the selection of Comparable Uncontrolled Transactions used by the corporation for
the Controlled Transactions (transactions in which sellers and buyers without special relationships with each other as
stipulated in Article 66.4 Paragraph 2 Item 1(a) of the Act trade inventory assets similar to those related to Controlled
Transactions under similar circumstances to those for the Controlled Transactions, Comparable Uncontrolled Transactions
as stipulated in Article 39.12 Paragraph 6 of the Order, Comparable Uncontrolled Transactions as stipulated in Paragraph
7 of the same article, Comparable Uncontrolled Transactions as stipulated in Paragraph 8 Item 1(a) of the same article,
Comparable Uncontrolled Transactions as stipulated in (c)(1) of the same item, Comparable Uncontrolled Transactions as
stipulated in Item 2 of the same paragraph, Comparable Uncontrolled Transactions as stipulated in Item 3 of the same
paragraph, Comparable Uncontrolled Transactions as stipulated in Item 4 of the same paragraph, and Comparable
Uncontrolled Transactions as stipulated in Item 5 of the same paragraph; this also applies to the rest of this item)(including transactions equivalent to Comparable Uncontrolled Transactions related to the similar method listed in Article
66.4 Paragraph 2 Item 1(d) of the Act, transactions equivalent to Comparable Uncontrolled Transactions related to themethod listed in Article 39.12 Paragraph 8 Item 6 of the Order, and transactions equivalent to Comparable Uncontrolled
Transactions related to the method stipulated in Article 66.4 Paragraph 2 Item 2 of the Act; hereinafter referred to as"Comparable Uncontrolled Transactions" in the rest of this item) and details of the Comparable Uncontrolled Transactions(including financial information on the Comparable Uncontrolled Transactions)(c) Documents for the corporations to calculate the amount computed as one that belongs to the corporations and theforeign-related parties related thereto using the method listed in Article 39.12 Paragraph 8 Item 1 of the Order or the one
listed in Item 6 of the same paragraph (limited to methods similar to the one listed in Item 1 of the same paragraph) if themethod is selected by the corporations (excluding the documents listed in (b) and (e))(d) Documents describing the reason the corporations consider several Controlled Transactions as a single one and calculate
an arm's length price for the transaction and the content of each transaction if they make such a calculation(e) Documents describing the reason differences are adjusted for Comparable Uncontrolled Transactions (adjustments as
stipulated in Article 66.4 Paragraph 2 Item 1(a) of the Act, necessary adjustments as stipulated in Article 39.12 Paragraph
6 of the Order, necessary adjustments as stipulated in Paragraph 7 of the same article, necessary adjustments as stipulated
in Paragraph 8 Item 1(a) of the same article, necessary adjustments as stipulated in (c)(1) of the same item, necessary
adjustments as stipulated in Item 2 of the same paragraph, necessary adjustments as stipulated in Item 3 of the same
paragraph, necessary adjustments as stipulated in Item 4 of the same paragraph, and necessary adjustments as stipulated in
Item 5 of the same paragraph; this also applies to the rest of this item) (including adjustments equivalent to difference
adjustments for the similar methods listed in Article 66.4 Paragraph 2 Item 1(d) of the Act, adjustments equivalent todifference adjustments for the method listed in Article 39.12 Paragraph 8 Item 6 of the Order, and adjustments equivalent
to difference adjustments for the method stipulated in Article 66.4 Paragraph 2 Item 2 of the Act; hereinafter referred to as"Difference Adjustments" in the rest of this item) and the method to adjust such differences if such adjustments are made(Note) Underlined words and phrases indicate those added in the tax reform of FY2016.

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Example of the deadline for submission of the Notification for Ultimate Parent Entity, CbC Report, and Master File

The deadline for submission of the Notification for Ultimate Parent Entity is different from that for submissionof the CbC Report and the Master File.
For example, the deadline for submission of reports (notifications) by Specified MNE Groups whose
Ultimate Parent Entity settles its accounts in March of each year is as shown in the figure below.
April 1, 2016
March 31, 2017
First year covered by documents

Notification for
Ultimate Parent
EntityDeadline for

Enforcement of law

submission

March 31, 2018

Day w hen the fiscal year coveredby the Notification ends
If one company submits

Submission the Notif ication on behalfof the Group

Deadline forCountry-byCountry Report

Master File

Enforcement of law

submission

Enforcement of law

Within one year of the day follow ing
the one w hen the fiscal year coveredby the Report ends

Submission

If one company submits theReport on behalf of the Group

Deadline forWithin one year of the day follow ing
the one w hen the fiscal year coveredby the Report ends

submission

Submission

If one company submits theReport on behalf of the Group(Reference: Schedule for submission of documents to be prepared by corporations engaged in Controlled Transactions)
April 1, 2016
April 1, 2017
March 31, 2018
First year in w hich contemporaneous
documentation is required

Local File

Enforce-mentof law

Deadline for submissionof final returns

Deadline forpreparation

To be submitted if requested
In the course of tax
examination

 The National Tax Agency provides information on this revision on its website (www.nta.go.jp).
 If you have questions about this leaflet, please inquire to the Regional Taxation Bureau that supervises the place
where you pay tax according to the categories listed below. When you inquire, please tell the officer answering
your inquiry that you have questions about the transfer pricing documentation or want to talk with the officer incharge of international taxation.
[If you are a corporation supervised by the Large Enterprise Examination Division]
Tokyo Regional Taxation Bureau: Transfer Pricing Division, First Large Enterprise Examination Department
Osaka Regional Taxation Bureau: Transfer Pricing Division, First Large Enterprise Examination Department
Nagoya Regional Taxation Bureau: Transfer Pricing Division, Large Enterprise Examination Department
Kanto-Shinetsu Regional Taxation Bureau: International Examination of Large Enterprise Division, Large
Enterprise Examination and Criminal Investigation Department
Sapporo, Sendai, Kanazawa, Hiroshima, Takamatsu, Fukuoka, and Kumamoto Regional Taxation Bureaus:
Management Division (Large Enterprise Examination), Large Enterprise Examination and Criminal
Investigation Department
Okinawa Regional Taxation Office: Large Enterprise Examination Division[If you are a corporation other than those supervised by the Large Enterprise Examination Division]
Sapporo, Sendai, Kanto-Shinetsu Tokyo, Nagoya, Osaka, Hiroshima, and Fukuoka Regional Taxation
Bureaus: Corporation Taxation Division, Second Taxation Department
Kanazawa, Takamatsu, and Kumamoto Regional Taxation Bureaus: Corporation Taxation Division, Taxation
Department
Okinawa Regional Taxation Office: Corporation Taxation Division(Note) For the location and phone number of Regional Taxation Bureaus nationwide, see the page"http://www.nta.go.jp/about/organization/access/map.htm（Japanese）" on the National Tax Agency's
website.

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