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April 22, 2021
 Updated July 8, 2022
Financial Services Agency

  Partial revision of the notice regarding the tax treatment of Carried Interest

 The Financial Instruments and Exchange Act was amended to establish a new entry system regarding the investment management business with the updated procedures (notification) pertaining to Special Business for Foreign Investors, etc. and Special Business during Transition Period. Also, under the amendment to the Cabinet Office Ordinance on Definitions under Article 2 of the Financial Instruments and Exchange Act, a foreign investment manager who has difficulty in continuing its business in the foreign country can continue the business temporarily in Japan based on an approval by the commissioner of the FSA.
 In response, the FSA, in consultation with the relevant authorities, has partially revised the notice regarding the tax treatment of Carried Interest (released on April 1, 2021) with respect to the definition of "Investment management business".[PDFPDF(297KB)]

 In addition, when fund managers receiving Carried Interest file their individual income tax returns, the following sheets should be enclosed:
1) Check sheets to ensure that the conditions for Carried Interest (described in the Notice) are satisfied[PDFPDF(178KB)/Word(151KB)]
2) Calculation sheets to describe the breakdown of income for Carried Interest (e.g., categories of income, and amounts of gross revenue/cost)[PDFPDF(218KB)/Word(90KB)]

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