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New M&A rules let Japanese companies skip US paperwork

Tokyo has long complained about onerous filing requirements

U.S. Vice President Mike Pence, left, and Japanese Deputy Prime Minister Taro Aso attend the first round of an economic dialogue in Tokyo in April 2017. U.S. disclosure requirements for Japanese companies involved in even domestic M&A deals have long been a sticking point in such talks.   © Reuters

TOKYO -- The Japanese government is preparing legislation to encourage more mergers and acquisitions by reducing tax on no-cash deals.

Until now, Japanese companies have been allowed to take over other companies using their own stock instead of cash, but in such cases, existing shareholders were charged a tax on gains from relinquishing their stock. The new rules would allow them to withhold this tax payment until they cash in on any stock received in the deal.

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