Japanese Transfer Pricing Policy: A Note

In the past three years, the financial press has devoted a good deal of coverage to the alleged use of transfer pricing policies by multinationals to gain a tax advantage. Such a tax advantage accrues because different countries may constitute tax havens or because the overall tax may be lower for a variety of reasons, thus resulting in higher profits (and taxes) in the home country of the parent/holding company or a third country, which thereby benefit from the use of another country’s resources.