Service (Transfer Pricing & International Tax Consulting)
Tax Planning:
We support tax planning that can minimize taxation risks by complying with international tax rules such as transfer pricing and tax haven regulations, while utilizing such rules both to save tax lawfully and improve net cash flow. As one of our unique know-how, we introduce the following two types of specialized tax planning.
(1) Tax Planning Utilizing Captive
“Captive” usually refers to a reinsurance subsidiary set up abroad based on a company’s risk management policy. Captive undertakes a part of insurance which were originally provided by insurers to the company. The consolidated group can expect increase in cash flows such as reinsurance premium and financial profits earned by the captive, and those cash flows can be used for capital expenditure or M&A in overseas regions.
If a company sets up captive in countries having corporate tax rate lower than Japan (and if the number of accidents occurred is within a certain extent), it can generate more cash flows. However, if the captive is established in very low tax or non-tax jurisdiction so called tax haven, the Japanese tax authority is likely to levy heavy tax that may offset the benefit earned by the captive. Therefore, when setting up captive, it is very important to accompany effective tax planning which manages international taxation risks.
Our co-work with insurance brokers and risk management specialists within Cosmos Group can provide captive scheme with secured tax planning which can be tailored to client’s needs.
(2) Tax Consulting For Global Financial Investment:
As Japan continues to place interest rates extremely lower so that we can expect very few interest revenue from bank deposit or bond investment in Japan, Japanese corporations and wealthy individuals have been paying more attention to overseas investment. However, investors should be careful about foreign exchange risk, and taxes (withholding tax on interest and capital gain tax) that substantially affect return on investment. We support investors to find the best investment structure and obtain reasonable return from tax perspective.
(Main contents of service)
- Advice on preferred subject for investment (region, country, issuer etc.)
- Advice on the most tax-efficient investment structure (through subsidiary or direct investment etc.)
- Implementation support (setting up structure, establishment of subsidiary etc.)
Please contact us for the detail of our tax planning services.