Transfer price requirements in Japan

Local file

Local file is dfined as the documents deemed necessary for calculating arm's length price and includes the follwoing:
・ Documents describing the details of foreign-related transactions conducted by taxpayers
・ Documents for calculating arm's length prices used by taxpayers

Local files are exempted for the company of which controlled transactions with one foreign-related party during the current business year meet both condtions below:

(1) If the amount of transactions (total of receipts and payments) with the foreign 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) with the foreign-related party during the previous business year (the current business year if there was not

Annual return

Related party filing Schedule 17(4) is part of corporate tax annual return, which includes infromation such as:

① Names of foreign-related parties
② Location of the head office or main office of foreign-related parties
③ Main business of foreign-related parties
④ Number of employees related to foreign countries, etc.