New Document Retention Rules for Intragroup Transactions

The 2026 Tax Reform introduced new documentation retention requirements applicable to certain transactions between Japanese domestic corporations (“Japanese corporations”) and their related parties. Under the new rules, taxpayers are required to obtain, prepare, and retain detailed supporting documentation demonstrating how consideration for such transactions has been determined. The requirements are particularly relevant to service and intangible asset transactions, where taxpayers may be expected to maintain documentation explaining the underlying services or assets, the amount charged, and the basis on which the consideration was calculated. Given that non-compliance may result in the revocation of blue return filing status, the reform is expected to lead to increased scrutiny of related-party transactions during future tax audits. 

This newsletter provides an overview of the new rules, the policy objectives underlying the reform, the practical level of documentation expected by the tax authorities, and the key steps companies should consider in responding to the new requirements.