Japan's Proposed Anti-Hybrid Rule

Japan's  2015 Tax Reform as proposed by the country's governing coalition includes an anti-hybrid rule. Under the rule, dividends received from a foreign company would not be eligible for the country's participation exemption for foreign dividends if the dividend is deductible in the jurisdiction of residence of the foreign company. The rule would apply for dividends received in taxable years beginning on or after 1 April 2016. However, a two year grandfathering would apply for divi…