Allan Cinnamon (Cintax the Word Ltd) provides a quarterly update on tax treaty developments.
Tokyo District Court anticipates BEPS action 7
In a significant decision on 28 May 2015 the Tokyo District Court (Gyou 152) anticipating BEPS Action 7 held that a US person making online product sales to Japanese customers maintained a taxable PE in Japan to which all sales profits were attributable. The taxpayer used an apartment and warehouse located in Japan for storage packing delivery and product return. These activities in particular the quick delivery to customers and the handling of returned products were important elements of an online business and so went beyond the preparatory and auxiliary activities exception in article 5.4(a) of the Japan/US treaty.
Observations
Apart from any treaty...
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Allan Cinnamon (Cintax the Word Ltd) provides a quarterly update on tax treaty developments.
Tokyo District Court anticipates BEPS action 7
In a significant decision on 28 May 2015 the Tokyo District Court (Gyou 152) anticipating BEPS Action 7 held that a US person making online product sales to Japanese customers maintained a taxable PE in Japan to which all sales profits were attributable. The taxpayer used an apartment and warehouse located in Japan for storage packing delivery and product return. These activities in particular the quick delivery to customers and the handling of returned products were important elements of an online business and so went beyond the preparatory and auxiliary activities exception in article 5.4(a) of the Japan/US treaty.
Observations
Apart from any treaty...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")