Requirement for banks to collect and remit information regarding bank accounts owned by non-residents
A tax reporting system is applicable under which individuals are required to report information to the relevant branch of the financial institution, which will, in turn, submit such information to the tax authorities in Japan.
The person who contracts with the financial institution for a deposit to a bank account in Japan on or after 1 January 2017 is required to report the relevant information to the bank, including (i) name, (ii) address, (iii) date of birth, and (iv) resident country. If the resident country is outside Japan, the individual is required to report the taxpayer identification number in the taxpayer’s resident country. The financial institution is required to report the individual information collected as well as details regarding the account (balances, transactions, etc.) as of 31 December by the following 30 April.
Corporate tax measures for reorganisations
Before the 2017 Tax Reform, a corporate demerger by a corporation with many shareholders where the shares in the new company are given to the shareholders does not qualify as a tax qualified demerger. These rules are relaxed under the 2017 Tax Reform Act whereby a spin-off of a specific business by a corporation without a controlling shareholder becomes tax qualified under certain conditions.
Distribution in kind
Before the 2017 Tax Reform, a distribution in kind by a corporation with many shareholders is not tax qualified. Under the 2017 Tax Reform Act, a spin-off conducted as a distribution in kind of shares in a 100% subsidiary becomes tax qualified under certain conditions.
Minority shareholder squeeze-outs
Under the 2017 Tax Reform Act, creating a 100% subsidiary through a squeeze out process using shares with compulsory acquisition rights, share consolidation, and a request to sell back shares, is considered a type of corporate reorganisation. As part of bringing such squeeze outs within the corporate reorganisation framework, special measures will be introduced, including mark-to-market rules and the special rules on consolidated taxation.
In a merger or share-for-share transfer, if the merging corporation or the 100% parent corporation owns 2/3 or more of the merged corporation or the 100% subsidiary, consideration other than shares can be provided to minority shareholders without disqualifying the corporate reorganisation.