A domestic corporation or a foreign corporation with a domestic place of business must submit a transaction statement for stock options, etc., to the tax office having jurisdiction over the taxpayer. This statement must include details of the stock options, etc. and the personal information of the employees, if the following events occur:
• Stock options, etc., which are granted by a foreign corporation, are exercised by the employees. Or:
• Stock-based compensation (referring to bonuses paid in the form of shares or cash equivalent to the value of shares) is paid from a foreign corporation.
The statement must be submitted by March 10 of the year following the taxable period in which the event occurred. In cases of business suspension, closure, or dissolution, the statement must be submitted by the end of the second month following the month in which the suspension, closure, or dissolution occurred.
• Submission requirements:
(1) Submitting entity:
• Domestic corporation: A foreign corporation directly or indirectly owns 50% or more of the domestic corporation’s shares.
• Foreign corporation’s domestic place of business: The head office or branch of the foreign corporation or another foreign corporation that directly or indirectly owns 50% or
more of the foreign corporation’s shares.
(2) Reporting transaction:
• Stock options, etc. (including similar rights, such as the right to acquire or purchase shares at a predetermined price) are granted by a foreign corporation and the stock
options, etc. are exercised by the employees. Or:
• Stock-based compensation (bonuses paid in the form of stocks or cash equivalent to the value of the stock, according to pre-established stock-based compensation
criteria) is paid from a foreign corporation.
• Required documentation:
A transaction statement detailing the granting, exercising, or payment of stock options, the profit from exercising or receiving stock options, and the personal information of the employees.
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