Japan submits draft legislation to implement IIR to align with OECD BEPS 2.0 Pillar Two

Draft legislation for the 2023 tax reform has been submitted to the Japanese Diet. The draft legislation includes provisions to implement the Income Inclusion Rule to align with the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two initiative.

The Legislation is expected to be passed by the Diet in March 2023, and to be legally effective as of 1 April 2023.