National Tax Agency, Japan
Mutual Agreement Procedures Report 2021
When international double taxation arises from transfer pricing adjustments or other, 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 request fromtaxpayers. The NTA also enters into Bilateral Advance Pricing Arrangements (“BAPA”) in order to ensure
the predictability of taxpayers and promote the proper and smooth administration of the transfer pricingtaxation.
1. MAP requests receivedDuring the 2020 operation year (from July 2020 to June 2021), the NTA received 185 MAPrequests (146 (79%) for BAPA and 39 (21%) for Transfer pricing adjustment etc.).
The number of MAP requests received decreased to 93% from the 2019 operation year.
(Note) Please see Attachment 1 for the details of type of MAP cases.

○○

Chart 1: MAP requests received
Number of requests receivedTotal

200
157
150

197

200
185

143

135

131

149

151

BAPA

162

166

163
148

146

131

112

Transfer Pricing Adjustment etc.

500195

219

167
152

100

187

206

22201031362011

2012

4520133820144420155631201640201752392018

2019

2020

Operation Year(Notes)

123Each operation year runs from 1 July until 30 June in the following year.
The number of MAP requests received consists of both cases where the NTA received
requests from taxpayers and cases where the NTA received requests through foreign tax
authorities. In some countries or regions, taxpayers make a request separately with respect
to each taxation year for which an adjustment was made. Counting such requests
collectively, the number of MAP requests received during the 2020 operation year would be183.
“Transfer pricing adjustment etc.” includes cases related to permanent establishments(PEs) or withholding taxes.

1National Tax Agency, Japan
2. MAP cases closed
2.1 The number of MAP cases closed
The number of MAP cases closed during the 2020 operation year amounted to 155 (122 (79%)
for BAPA and 33 (21%) for Transfer pricing adjustment etc.),which has decreased to 83% fromthe 2019 operation year.
(Note) Please see Attachment 1 and Attachment 3 for the details of type of MAP cases.

○Chart 2: MAP cases closed
Number of cases closed

Total150

164

128100

170

174

171

157135BAPA

187

186

146

145

166

155
141
129

141
121

143
126

155

122

122

Transfer Pricing Adjustment etc.

50

41

36

33

2010

2011

28

2015

2016

20

220292012

2013

2014

44

41

41

2017

2018

2019

33

2020

Operation Year(Notes)

In some countries or regions, taxpayers make a request separately with respect to each taxation
year for which an adjustment was made. Counting such requests collectively, the number of MAP
cases closed during the 2020 operation year would be 144

2.2 Average time to close a MAP case
○ The average time to close a MAP case closed in the 2020 operation year was 30.3 months(29.4 months in the 2019 operation year).
○ The average time to close a BAPA case closed was 29.2 months (30.7 months in the 2019
operation year).
○ The average time to close a case of transfer pricing adjustment etc. was 34.4 months (24.9months in the 2019 operation year).

2

National Tax Agency, Japan
3. Year-End Inventory
3.1 The number of cases in the Year-End Inventory○ Since the number of MAP requests received was larger than the number of MAP cases closed,
the number of cases in the inventory at the end of the 2020 operation year increased from theyear before.
(Note) Please see Attachment 1 for the details of type of MAP cases.

Chart 3: Year- End Inventory
Number of cases in the Year-End inventory

600
550
500
450
400
350
300
250
200
150
100
50
0

Transfer Pricing Adjustment etc.
BAPA

528
496
465

456

425
373
61

356

70

65

110

113

343

2016

95

572
141

124

135

387

404

407

431

2017

2018

2019

2020

109

379

359

542

77

312

289

291

302

330

355

2010

2011

2012

2013

2014

2015

Operation Year(Notes)

In some countries or regions, taxpayers make a request separately with respect to eachtaxation year for which an adjustment was made. Count such requests collectively, the numberof cases in the inventory at the end of the 2020 operation year would be 514.

3

National Tax Agency, Japan
3.2 Region-by-region inventory
The number of MAP cases with Asia/Oceania accounted for the largest part in the whole YearEnd inventory of the 2020 operation year.
○ In the Year-End inventory of the 2020 operation year, cases with the United States (19%) are themost, followed by China (17%), India (15%), Korea (11%) and Germany (7%).
(Note) Please see Attachment 2 for the list of treaty partners with which the NTA has MAP
inventory as of June 30, 2021.
○Chart 4: Year-End Inventory by region
Number400350336

300

96

Transfer Pricing Adjustment etc.
BAPA250
20015012310013113325011081240

0The Americas

Asia/Oceania

4EuropeNational Tax Agency, Japan
4. MAP cases with non-OECD economies
4.1 The number of MAP cases○ In the 2020 operation year, as for the MAP with non-OECD economies, 41 requests were received
and 42 cases were closed.
○ The number of MAP cases with non-OECD economies in the Year-End inventory was 256,accounting for 45% of all cases.
Chart 5:MAP requests received

MAP cases closed
NumberNumber
8990

76

80

71705455

Total

Total
44455960
5040302041444428133545 BAPA
43412832 Transfer Pricing
Adjustment etc.

10253415702016

2017

2018

28
BAPA
20423130
23

238

Transfer Pricing
Adjustment etc.

2016

2017

2129

2220520192020
Operation Year

2018

2019
2020
Operation Year

Year-End inventory
Number
300
250
200
150

Transfer Pricing Adjustment etc.
BAPA
245

257

256

200

98

83

146

159

173

2018

2019

178

99

76
75

100
50

103

1240
2016

2017

2020

Operation Year

4.2 Average time to close a MAP case with non-OECD economies○ The average time to close a MAP case with non-OECD economies closed in the 2020 operationyear was 43.2 months (32.9 months in the 2019 operation year).
○ The average time to close a BAPA case with non-OECD economies was 42.8 months (43.2months in the 2019 operation year).
○ The average time to close a case of transfer pricing adjustment etc. was 43.5 months (22.2 monthsin the 2019 operation year).

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

Pricing

OthersTotalAdjustment

201820192020（Notes） 1

Requests Received163542219

Cases Closed

146

374187Year-End Inventory

404

111

13528

Requests Received

148

448200Cases Closed

145

365186Year-End Inventory

407

119

16542

Requests Received

146

345185

Cases Closed

122

30

3

155

Year-End Inventory

431

123

18572

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

2

The number of MAP requests received consists of both cases where the NTA
received requests from taxpayers and cases where the NTA received requests
through foreign tax authorities.

3MAP requests for compensating adjustments or amendments with respect topreviously agreed APAs are included in the year when such requests were made.

4

MAP cases closed includes cases of which MAP requests are withdrawn bytaxpayers as well as cases resolved through the agreements with treaty partners.

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

6National Tax Agency, Japan(Attachment 2)
Treaty Partners with which the NTA has MAP inventory (as of June 30, 2021)
EuropeAsia/Oceania

The Americas

Belgium

Australia

CanadaCzech Republic

Korea

MexicoDenmark

New ZealandUnited States

Total(OECD countries)

FinlandFranceGermany
Hungary20partners

Ireland
Italy
Netherlands
Portugal
SwedenSwitzerland
United Kingdom(Non-OECD economies)
China
Hong KongIndia

9 partners

Indonesia
Malaysia
Singapore
TaiwanThailand
Vietnam
14 partners

12 partners

73 partners

29 partners

National Tax Agency, Japan(Attachment 3)
Types of MAP cases closed during the 2020 operation year
IndustryA
5

Others
24G
13

B
29F
9C
20
D
11E
44

Manufacturing
Wholesale/RetailOthers
Total109
2224
155

(70%)
(14%)
(15%)
(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 (machineries and equipment)
E: Manufacturing (others)
F: Trading (import/export)
G: Other wholesale/retailType of transaction

Intangibles
72

Inventories
123

Services
87(Notes)1. The sum of the numbers in the chart above does not correspond to the total number of MAP cases
closed (155), as some cases are counted for each type of transaction when multiple types oftransaction were covered.
2. MAP requests for compensation adjustments or amendments with respect to previously agreed
APAs are counted as the same transaction in the original APA agreement.
8National Tax Agency, Japan
Transfer pricing method

Comparable
uncontrolled price(CUP) method, 6

Cost plus (CP)method, 2
Profit split (PS)method, 5Others, 39

Transactional net
margin method(TNMM), 91(Notes)
1. The sum of the numbers in the chart above does not correspond to the total number of MAP cases
closed (155), as some cases are counted for each transfer pricing method when multiple methods
were applied.
2. MAP 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.

9National Tax Agency, Japan(Reference)
Terminologies

Mutual Agreement Procedures (MAP) are a formalized set of procedures between tax authorities oftreaty partners which are provided in tax treaties. The NTA enters into MAP when taxpayers consider
that international double taxation arise or will arise from transfer pricing adjustments or others, or whentaxpayers request bilateral APA.
(Note 1)
72 tax treaties that Japan has concluded (which covers 81 countries/regions as of the end of June2021) contain the provisions of the Mutual Agreement Procedures.
(Note 2)An Advance Pricing Arrangement (APA) is an arrangement whereby, based on an application from ataxpayer, the tax administration confirms in advance a set of criteria such as methods, comparables
and adjustments thereto, and critical assumptions as to future events for the determination of thetransfer pricing for transactions between the taxpayer and its foreign-related entity/entities over a fixed
period of time. The tax administration will refrain from adjusting the transfer pricing set by the taxpayer
if such taxpayer files its tax returns in accordance with the confirmed APA conditions for the years
covered by the APA.

10