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Economy

US pushes Japan Inc. to pay taxes on IP profit from America

Policy targets gains from data and brand value generated locally for multinationals

The IRS has indicated to such foreign companies as Toyota that they will eventually need to rework their tax obligations for U.S. subsidiaries to reflect the contribution of intangible assets in America.   © Reuters

TOKYO -- U.S. authorities are pressing foreign companies such as Toyota Motor to pay taxes on profit from data and brand value gained in America, aiming to bring in tax revenue that would otherwise go abroad.

The Internal Revenue Service in February 2019 announced a new policy stating that multinationals should calculate the value of their intangible assets in the U.S., such as intellectual property, and book profits earned from them in America. It set out a method for calculating these earnings.

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