Bulletin No. 2021–13

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2021–13

March 29, 2021

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

TAX CONVENTIONS

Announcement 2021-5, page 965.

The competent authorities of the United States of America and Japan have entered into an arrangement regarding

Finding Lists begin on page ii.

the implementation of the arbitration process provided for

in paragraphs 5, 6, and 7 of Article 25 of the Convention

between the Government of Japan and the Government of

the United States of America for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with respect to

Taxes on Income.

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Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

March 29, 2021 

Bulletin No. 2021–13

Part IV

U.S.-Japan Competent

Authority Arrangement

Regarding Treaty

Arbitration Clause

Announcement 2021-5

The following is a copy of the Competent Authority Arrangement entered

into by the competent authorities of the

United States of America and Japan, with

respect to the implementation of the arbitration process provided for in paragraphs

5, 6, and 7 of Article 25 of the Convention between the Government of Japan

and the Government of the United States

of America for the Avoidance of Double

Taxation and the Prevention of Fiscal

Evasion with respect to Taxes on Income

signed at Washington on November 6,

2003, as amended by the Protocol signed

at Washington on January 24, 2013 (the

“Convention”) and paragraph 14 of the

Protocol signed at Washington on November 6, 2003, as amended by the Protocol

signed at Washington on January 24, 2013

(the “Protocol of 2003”).

The text of the Competent Authority

Arrangement is as follows:

Implementing Arrangement regarding

Paragraphs 5, 6 and 7 of Article

25 of the Convention between the

Government of Japan and the

Government of the United States of

America for the Avoidance of Double

Taxation and the Prevention of Fiscal

Evasion with respect to Taxes on

Income

The competent authorities of Japan

and the United States of America have

established this arrangement (hereinafter

referred to as the “Arrangement”) to implement the arbitration process provided

for in paragraphs 5, 6 and 7 of Article

25 of the Convention between the Government of Japan and the Government

of the United States of America for the

Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with respect

to Taxes on Income signed at Washington

Bulletin No. 2021–13

on 6 November 2003 as amended by the

Protocol signed at Washington on 24 January 2013 (hereinafter referred to as “the

Convention”) and paragraph 14 of the

Protocol signed at Washington on 6 November 2003 as amended by the Protocol

signed at Washington on 24 January 2013

(hereinafter referred to as “the Protocol of

2003”).

Subject to certain exceptions described

in paragraph III, this arbitration process

applies to cases that the competent authorities of Japan and the United States have

determined are suitable for assistance under the mutual agreement procedure of

paragraphs 1, 2, 3 and 4 of Article 25 of

the Convention in accordance with published guidance, in the case of Japan, the

Commissioner’s Directive on the Mutual

Agreement Procedure issued on 25 June

2001 or any amendment or successor

provisions thereof, and in the case of the

United States, Revenue Procedure 201540 or any amendment or successor provisions thereof.

This Arrangement is adopted in accordance with subparagraph (i) of paragraph

7 of Article 25 of the Convention.

Both competent authorities will follow the procedures in this Arrangement in

good faith, and will ensure that the presenter of the case and the arbitrators will

follow the procedures in this Arrangement

in good faith.

I. Definitions and General Matters

A. “MAP” is the abbreviation for the

Mutual Agreement Procedure, which are

proceedings of the competent authorities

under Article 25 of the Convention.

B. The term “Concerned Person”

means the presenter of a case to a competent authority for consideration under

Article 25 of the Convention and all other

persons, if any, whose tax liability to either Contracting State may be directly affected by a mutual agreement arising from

that consideration.

C. The “Commencement Date” for a

case is the earliest date on which the information necessary to undertake substantive

consideration for a mutual agreement has

been received by both competent authori-

965

ties. The Commencement Date will be determined in accordance with paragraph IV.

D. Each competent authority will identify an individual or individuals within

the competent authority’s office to carry

on administrative coordination of arbitration matters. Actions identified in this

Arrangement which are to be taken by a

competent authority may be accomplished

by these individuals on behalf of the competent authority.

E. If a competent authority does not accept a MAP request for assistance from a

taxpayer, or ceases providing MAP assistance, the competent authority will notify,

and consult, with the other competent authority whether the case is not suitable for

assistance.

II. Cases Eligible for Arbitration

A. According to paragraphs 5, 6, and 7

of Article 25 of the Convention, arbitration will be available where:

1. the case was presented to the competent authority of the Contracting State of

which the presenter is a resident or, if his

case comes under paragraph 1 of Article

24 of the Convention, to that of the Contracting State of which he is a national, on

the basis that the actions of one or both

of the Contracting States have resulted

for him in taxation not in accordance with

the provisions of the Convention, and the

competent authorities are unable to reach

an agreement to resolve the case; and

2. a request for arbitration was presented in accordance with subparagraphs B

and C of paragraph V.

B. In determining whether arbitration is

available for a case, it is understood that:

1. taxation will be considered to have

resulted for the purpose of paragraph 5

of Article 25 of the Convention from the

actions of one or both of the Contracting States as soon as tax has been paid,

assessed or otherwise determined (for

example, a notification of correction, determination or deficiency of a tax liability has been issued), or in cases where the

taxpayer is officially notified by the tax

authorities that they intend to tax him on

a certain element of income (for example,

March 29, 2021

a notice of proposed adjustment has been

issued).

2. the fact that tax collection procedures may have been suspended will not

affect a determination that taxation has

resulted from the actions of one or both

Contracting States.

C. An unresolved case that is the subject of a request for an advance pricing

arrangement (hereinafter referred to as

“APA”) will be subject to arbitration procedures in accordance with paragraph

XVII.

III. Cases Not Eligible for Arbitration

Notwithstanding paragraph II, as provided in paragraphs 5, 6 and 7 of Article

25 of the Convention, arbitration will not

be available, for example:

1. for non-taxpayer-specific cases;

2. for a case if a decision with respect

to such case has already been rendered by

a court or administrative tribunal of either

Contracting State;

3. for a case for which both competent

authorities have decided that the case is

not suitable for resolution through arbitration and have notified the presenter of the case of such decision no later

than two years after the Commencement

Date; or

4. for a case that is the subject only of

the provisions set forth in the final sentence of paragraph 3 of Article 25 of the

Convention (i.e., for the elimination of

double taxation in cases not provided for

in the Convention).

IV. Commencement Date

A. The term “information necessary to

undertake substantive consideration for a

mutual agreement” in subparagraph (b) of

paragraph 7 of Article 25 of the Convention, except as described in subparagraph

C of paragraph XVII with respect to a case

that is the subject of request for an APA,

means:

1. the full name and address of the

presenter of the case for consideration by

both competent authorities;

2. the full name and address of any other Concerned Person than the presenter of

the case;

3. the taxable years of the Concerned

Person which are the subject of the case;

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4. the nature and date of the actions giving rise to the case, including any amounts

of income, expense or tax in dispute in the

currencies of both Contracting States;

5. an explanation of the reason for the

MAP request, and the nature of the relief

sought or the action requested in the Contracting States with respect to the issues

raised in the case;

6. the relationship, situation or structure of the transactions and related parties

involved in the case;

7. a statement indicating whether a

Concerned Person has filed a notice of

objection, notice of appeal, or comparable

documentation with respect to the case in

either of the Contracting States;

8. a copy of any documents issued by

the tax authority of either or both Contracting States with regard to the actions

giving rise to the case; and

9. any specific additional information

necessary for initial consideration of the

case and requested by the competent authority within 45 days after the receipt

(from either a Concerned Person or the

other competent authority) of the MAP request. This period may be extended up to

90 days with the concurrence of the other

competent authority. Where the MAP request is provided to only one competent

authority by the Concerned Person(s),

that competent authority will inform the

Concerned Person of the date on which

it transmits the MAP request to the other

competent authority.

B. Both competent authorities will

confirm to each other the date on which

all the information described in subparagraph A was received by both competent

authorities, i.e., the Commencement Date

of a case.

C. Once the Commencement Date of

a case has been confirmed by both competent authorities under subparagraph B,

the competent authority to whom that case

has been presented under paragraph 1 of

Article 25 of the Convention will notify

the presenter of the case of that date.

V. Request for Submission of Case to

Arbitration

A. An arbitration proceeding with respect to a case will begin on a date (hereinafter referred to as the “Date Arbitration

Proceedings Begin”) as identified accord-

966

ing to subparagraph (c) or (d) of paragraph

7 of Article 25 of the Convention. Except

as otherwise described in paragraph XVII

with respect to a case that is the subject

of a request for an APA, according to subparagraph (c) of paragraph 7 of Article 25

of the Convention, the Date Arbitration

Proceedings Begin with respect to a case

is the later of:

1. two years after the Commencement

Date of that case, unless both competent

authorities have decided on a different

date and notified the presenter of the case

of such agreement (as provided in subparagraphs E and F); and

2. where there is at least one Concerned Person involved in the case in

each Contracting State, the earliest date

on which both competent authorities have

received, and where there is only one

Concerned Person involved in the case,

the date on which the competent authority has received, a request for arbitration

as described in subparagraph B accompanied with all necessary attachments as

described in subparagraph C regarding a

case eligible for arbitration.

B. A request for arbitration will be

made in writing, and sent to the competent authority of which the presenter of

the case is a resident or, if his or her case

comes under paragraph 1 of Article 24 of

the Convention, to that of the Contracting State of which he or she is a national

through:

(in Japan): Office of Mutual Agreement

Procedures, National Tax Agency; and

(in the United States): the United States

Competent Authority, according to section

10 (Arbitration) of Revenue Procedure

2015-40 (or any applicable subsequent

guidance).

C. A request for arbitration will be accompanied with:

1. sufficient information to identify the

case;

2. a written statement that no decision

with respect to such case has already been

rendered by a court or administrative tribunal of either Contracting State; and

3. a written statement regarding confidentiality in subparagraph A of paragraph

VI from all the Concerned Persons and

their authorized representatives or agents

according to formats specified by both

competent authorities.

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D. After the receipt of a request for arbitration, the competent authority who received it will immediately inform the other competent authority of the fact that the

request was submitted, and send a copy of

the request and the accompanying information and statements within 10 days to

the other competent authority.

E. According to clause (i) of subparagraph (c) or clause (i) of subparagraph (d)

of paragraph 7 of Article 25 of the Convention, both competent authorities may decide in appropriate situations that the Date

Arbitration Proceedings Begin with respect

to a MAP case will be later than what it

would have been without such decision.

Such appropriate situations could be, for

example, where the competent authorities

are close to reaching a mutual agreement

to resolve the case, where there has been a

delay by a Concerned Person in providing

information in the MAP case, where MAP

is suspended by a request from the presenter of the case, or where a Concerned Person

has provided significant new information

after the Commencement Date of the case.

Unless otherwise agreed between the competent authorities and the relevant Concerned Person, the competent authorities

will make the decision by the later date of:

1. two years after the Commencement

Date of the MAP case; or

2. the date when the request for arbitration is submitted.

F. If both competent authorities decide

the Date Arbitration Proceedings Begin

with respect to a case under subparagraph

E, then the competent authority to whom

that case has been presented will immediately notify the presenter of the case of the

date so decided.

G. If both competent authorities determine that the case is not suitable for

resolution through arbitration, the competent authority to whom that case has been

presented will immediately notify the presenter of the case of that determination.

agree, when the request for arbitration is

submitted, not to disclose to any person

(except other Concerned Persons) any

information received during the course

of the arbitration proceeding from either

competent authority or the arbitration

panel, other than the determination of the

panel.

B. No information relating to an arbitration proceeding (including the determination of the arbitration panel) will be

disclosed by the competent authorities,

except as permitted by the Convention

and the laws of the Contracting States.

In addition, all material prepared in the

course of, or relating to, an arbitration

proceeding will be considered to be information exchanged between the competent

authorities pursuant to Article 26 of the

Convention.

C. For the purposes of an arbitration

proceeding under paragraphs 5 and 7 of

Article 25 of the Convention, the members of the arbitration panel (hereinafter

referred to as “arbitrators”) and their staff

will be considered to be “persons or authorities” to whom information may be

disclosed under Article 26 of the Convention.

D. Both competent authorities will ensure that all arbitrators (and any of their

staff which will assist them in carrying on

the arbitration), prior to their acting in an

arbitration proceeding, agree in the forms

specified by both competent authorities not

to disclose any information relating to an

arbitration proceeding (including the determination of the arbitration panel), and to

abide by and be subject to the confidentiality and nondisclosure provisions of Article

26 of the Convention and similar provisions

of relevant laws of the Contracting States.

However, the arbitrators or their staff will

disclose the determination of the arbitration

panel to the competent authorities.

VI. Confidentiality

A. According to subparagraph (b) of

paragraph 14 of the Protocol of 2003, in

order for an individual to be eligible as an

arbitrator:

1. the individual is not an employee nor

has been an employee within the twelvemonth period prior to the Date Arbitration

Proceedings Begin of the tax administration, the Treasury Department, or the Min-

According to subparagraph (b) of paragraph 5 and subparagraphs (f), (g) and (h)

of paragraph 7 of Article 25 of the Convention, the confidentiality of a case will

be maintained in the following manner:

A. All Concerned Persons and their

authorized representatives or agents will

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VII. Eligibility of Arbitrators

967

istry of Finance of the Contracting State

which identifies him or her;

2. the individual does not have any prior involvement with the specific matters

at issue in the arbitration proceeding for

which he or she is being considered as an

arbitrator; and

3. in addition, the individual who will

serve as the chair of the arbitration panel

(hereinafter referred to as “the Chair”) is

not a national or lawful permanent resident of either Contracting State.

B. Both competent authorities will each

prepare and exchange a list of individuals

who may be eligible and are willing to

serve as the Chair. The competent authorities will prepare and exchange such list every two years, or more often as necessary.

C. Both competent authorities will ensure that the staff of an arbitrator will meet

the same requirements described in subparagraph A.

VIII. Appointment of Arbitrators

A. According to subparagraph (b) of

paragraph 14 of the Protocol of 2003, the

arbitration panel will consist of three individual members.

B. Each competent authority will select

one arbitrator to the arbitration panel by

sending a copy of the forms identified in

subparagraph D of paragraph VI, signed

by the arbitrator, to the other competent

authority within 60 days after the Date Arbitration Proceedings Begin.

C. In the event that the competent authority fails to make such selection in the

manner and within the time period in subparagraph B, the other competent authority will select a second arbitrator within 90

days after the Date Arbitration Proceedings Begin.

D. The procedure in subparagraph C

will not apply, where the failure of such

selection within the time period in subparagraph B is due to the fact that an individual

who had agreed to serve as an arbitrator becomes unable to serve because of circumstances outside of his or her control (for

example, death, serious illness or natural

disaster). Both competent authorities will

determine the appropriate time period for

the selection of an arbitrator in such a case.

E. Within 60 days after the latter selection of the two initial arbitrators who were

selected by the competent authorities un-

March 29, 2021

der subparagraphs B, C and D (hereinafter

referred to as “ two initial arbitrators”),

the two initial arbitrators so selected will

select a third arbitrator, who will serve as

the Chair. The third arbitrator so selected

will inform both competent authorities of

his or her appointment as soon as possible. In order to help the two initial arbitrators make that selection, the competent

authorities will provide the two initial

arbitrators with a consensus list of individuals derived from the list described in

subparagraph B of paragraph VII (that is,

candidates to be the Chair) who appear to

be best qualified to decide the case under

consideration.

F. If the two initial arbitrators fail to select the third arbitrator in the manner and

within the time period in subparagraph

E, the two initial arbitrators will be dismissed, and each competent authority will

select a new arbitrator of the arbitration

panel.

G. The procedure in subparagraph F

will not apply, where the failure of such

selection within the time period in subparagraph E is due to the fact that the

individual selected to serve as the Chair

becomes unable to serve because of circumstances outside of his or her control

(for example, death, serious illness or natural disaster). In such a case, unless otherwise decided, both competent authorities

will provide the two initial arbitrators with

a revised consensus list of candidates to be

the Chair within 20 days after the end of

the period in subparagraph E. The two initial arbitrators will select a third arbitrator

from among the candidates so proposed

within 10 days after the receipt of the list

of candidates.

H. The arbitrators will be selected from

individuals who:

1. satisfy the eligibility requirements

identified in subparagraph A of paragraph

VII at the time of accepting an appointment to serve, and are reasonably expected to remain so during the entire Arbitration Proceeding and for a reasonable time

thereafter; and

2. have significant experience in international tax matters (he or she need

not, however, have experience as either a

judge or arbitrator).

I. An arbitrator will be deemed selected on the date on which he or she signs

the agreements (Statement, Declaration)

March 29, 2021

required by subparagraph D of paragraph

VI.

J. Where one of the two initial arbitrators becomes ineligible for service as

an arbitrator or for any other reasons it

is necessary to replace an arbitrator after

the arbitrator was selected, the competent

authority who had selected that individual

will select a replacement as soon as possible and no later than 60 days after the

position becomes vacant.

K. Where the Chair becomes ineligible

for service as an arbitrator or for any other

reasons it is necessary to replace the Chair

after the arbitrator was selected, the two

initial arbitrators will select a replacement

as soon as possible and no later than 30

days after the position becomes vacant.

L. If any arbitrator is unable to fulfill

his or her duties, the competent authorities will consult with the remaining panel

members to determine a new timetable, if

necessary.

M. The arbitrators will undertake to

promptly disclose to both competent authorities, in writing, any new facts or circumstances that arise during or following

the arbitration proceedings that might give

rise to doubts with respect to their impartiality or independence.

IX. Procedures and Terms of Reference

A. As soon as possible after the Date

Arbitration Proceedings Begin, both competent authorities will develop a brief

Statement of Information which will identify the Concerned Persons and contain a

general description of the proposed adjustments or similar issues to be resolved

in a case. The competent authority, or an

arbitrator selected by the competent authority, may disclose the Statement of Information, if the confidentiality of the information is ensured and such disclosure

is permitted by the law of the Contracting

State, to a candidate to be an arbitrator of

the case to check whether that candidate

satisfies the eligibility requirements identified in subparagraph A of paragraph VII.

B. Both competent authorities undertake to develop, within 30 days after the

Date Arbitration Proceedings Begin, an

agreed “Terms of Reference” for a case to

include:

1. a description of the relevant business

activities of the Concerned Persons;

968

2. a description of the adjustments or

similar issues in dispute in the case;

3. a description of the matters to be

considered for the resolution of the case;

including identification of all matters in

the case previously agreed between the

competent authorities; and

4. a description of the final position taken by each competent authority in the negotiation of the unresolved matters which

prevent the mutual agreement between the

competent authorities.

The competent authorities may also

provide logistical or procedural information in the Terms of Reference.

C. The Terms of Reference will be

communicated to the Chair on the date of

his or her appointment, or as soon thereafter as possible.

D. If the Terms of Reference has not

been completed by the date for submission of the proposed resolutions and position papers, both competent authorities

will send to each other and to the Chair

their most recent written proposals for

the Terms of Reference along with their

proposed resolutions and position papers.

All the matters identified as unresolved in

these draft Terms of References are treated as unresolved for the purpose of the

subsequent proceedings.

E. According to subparagraph (d) of

paragraph 14 of the Protocol of 2003,

each of the competent authorities will be

permitted to submit a proposed resolution, not to exceed five pages, addressing

each adjustment or similar issue raised in

a case. Such proposed resolution will be a

resolution of the entire case, and will reflect, without modification, all matters in

the case previously agreed between both

competent authorities. Such proposed

resolution will be limited to a disposition

of specific monetary amounts (for example, of income, profit, gain or expense)

or, where specified, the maximum rate of

tax charged pursuant to the Convention,

for each adjustment or similar issue in

the case, based on the application of the

Convention to the case. Each of the competent authorities will also be permitted to

submit a supporting position paper, not to

exceed 30 pages plus annexes, for consideration by the arbitration panel.

F. The submission of a proposed resolution and supporting position paper by

the competent authority will be made by

Bulletin No. 2021–13

posting it (or similarly sending it via express delivery service) to the Chair within

60 days after the appointment of the Chair.

Unless alternative arrangements are made,

the Chair will in turn send a copy of each

competent authority’s proposed resolution

and supporting position paper to the other

panel members and the other competent

authority within 5 days after the receipt of

the later submission.

G. In the event that only one of the

competent authorities submits a proposed

resolution within the allotted time, then

that proposed resolution will be deemed

to be the determination of the arbitration

panel in that case.

H. According to subparagraph (g) of

paragraph 14 of the Protocol of 2003, each

of the competent authorities will be permitted to submit a reply submission, not to

exceed 10 pages excluding annexes, to the

arbitration panel in order to address any

points raised by the proposed resolution

or supporting position paper submitted

by the other competent authority. In this

reply submission, the competent authority may also comment upon any papers

setting forth its analysis and views of the

case (hereinafter referred to as a “Presenter Position Paper”) submitted under the

provisions of paragraph X. If the competent authority exercises its option to also

comment upon a Presenter Position Paper,

its reply submission will not exceed 20

pages excluding annexes. The submission

of a reply submission by the competent

authority will be made by posting it (or

similarly sending it via express delivery

service) to the Chair within 120 days after the appointment of the Chair. Unless

alternative arrangements are made, the

Chair will send a copy of each competent

authority’s reply submission to the other

panel members and the other competent

authority within 5 days after the receipt of

the reply submission.

I. In a particular case, both competent

authorities may decide to use a different

presentation or page limitation for the

proposed resolutions, supporting position

papers or reply submissions, such as is

provided in paragraphs XV and XVI.

J. Any annex to a supporting position paper or reply submission will be a

document previously made available for

both competent authorities to use in negotiation. Any factual information used

Bulletin No. 2021–13

in a supporting position paper or reply

submission will be what was contained

in a document previously made available

for both competent authorities to use in

negotiation, or otherwise reflect information widely available to the general

public.

K. Except with respect to the final position taken by the other competent authority as described above in clause 4 of

subparagraph B of paragraph IX, the competent authority will only be permitted to

refer to a proposal for resolution made by

either competent authority during negotiations if that proposal is submitted to the

arbitration panel for consideration as a

proposed resolution.

L. Within 120 days after the receipt of

the proposed resolutions from both competent authorities, the arbitration panel

may ask both competent authorities in

writing for additional information. Such

additional information may be submitted

to the arbitration panel only at its request,

and will be provided within 30 days after the request. Copies of the arbitration

panel’s request and the competent authority’s response will be provided to the

other competent authority on the date on

which the request or the response is submitted. If the panel requests information

or analyses that have not previously been

available or considered for purposes of the

negotiation, the competent authorities will

consult to determine how to respond to the

panel’s request. The panel will not request

additional information from the presenter

of the case.

M. Unless otherwise decided between

both competent authorities and the Chair,

the competent authorities will send to the

Chair four copies of each document submitted to the arbitration panel, for distribution to the other arbitrators and the other competent authority.

N. Unless otherwise decided between

both competent authorities, any information (including any information provided

by the presenter of the case or his or her

authorized representatives or agents in

writing or orally) that was not available

to both competent authorities before the

Date Arbitration Proceedings Begin will

not be taken into account for purposes of

the arbitration decision. Furthermore, any

reply submission or any additional information that was provided to the panel after

969

the deadlines specified in subparagraphs

H and L respectively will not be taken into

account for purposes of the arbitration decision.

O. To the extent needed, the arbitration panel may adopt any additional procedures necessary for the conduct of its

business, provided that the procedures are

not inconsistent with any provision of Article 25 of the Convention, paragraph 14

of the Protocol of 2003, or this Arrangement or any other procedural rules decided between both competent authorities. If

the arbitration panel adopts any additional

procedures, the Chair will provide a written copy of them to the competent authorities.

X. Participation of the Person Who

Requested the Arbitration

A. According to subparagraph (h) of

paragraph 14 of the Protocol of 2003, the

presenter of the case is permitted to submit

for consideration by the arbitration panel

Presenter Position Paper by transmitting

it to the competent authority of which the

presenter is resident or, if his or her case

comes under paragraph 1 of Article 24 of

the Convention, to that of the Contracting

State of which he or she is a national within 30 days after a request for arbitration

made in conformance with the provisions

of paragraph V.

B. Both competent authorities will

advise the presenter of the case that the

Presenter Position Paper does not exceed

30 pages excluding annexes, and the Presenter Position Paper and annexes do not

include any information (including positions, arguments, analyses and documents)

not previously provided to the competent

authorities during their negotiation. The

competent authorities may decide a specific format, on a case by case basis, for

the Presenter Position Paper.

C. The competent authority which receives the Presenter Position Paper will

send a copy of the Presenter Position

Paper to the Chair (if the Chair has not

been appointed on the date on which the

receipt of the Presenter Position Paper,

immediately after the appointment of the

Chair) and the other competent authority

immediately (no later than 5 days after the

receipt of the original Presenter Position

Paper). That competent authority may ask

March 29, 2021

the presenter of the case to submit additional copies as necessary.

XI. Communication

A. Before the Chair is selected, both

competent authorities will send any correspondence concurrently to both arbitrators. After the Chair is selected, unless

otherwise decided between the Chair and

the competent authorities, the competent

authorities will send any correspondence

to the Chair. Similarly, the Chair will send

any correspondence concurrently to the

competent authorities.

B. Except for administrative or logistical matters, no competent authority will

have any ex parte communications with

an arbitrator.

C. All communication, except for logistical matters, between both competent

authorities and the arbitration panel will

be in writing. Written communication by

facsimile or email is allowed, however,

no information that may identify the taxpayer(s) may be included in an email unless other security precautions to protect

taxpayer information are agreed upon by

both competent authorities. Express mail

or air mail will be used for all correspondence other than that sent via facsimile or

email.

D. The arbitrators will communicate by

telephone, facsimile or face-to-face meetings. Arbitrators will communicate by

email; however they will not include any

taxpayer information in the email.

E. No substantive discussion will be

done, unless all arbitrators are present

(physically or remotely).

F. No arbitrator will have communications regarding the issues or matters before the arbitration panel with the presenter of the case, the taxpayers involved in

the case, or their representatives during or

subsequent to the arbitration process.

XII. Costs and Logistical

Arrangements

A. According to subparagraph (k) of

paragraph 14 of the Protocol of 2003, the

fees and expenses of the arbitrators, as

well as any costs incurred in connection

with the proceeding by the Contracting

States, will be borne equitably by the Contracting States in the following manner:

March 29, 2021

1. each competent authority will bear

the cost of its selected arbitrator and its

own expenses; and

2. the cost of the Chair and other expenses associated with the conduct of the

proceedings will be borne by the competent authorities in equal shares. The term

“other expenses associated with the conduct of the proceedings” does not include

indirect costs incurred for the logistical arrangements described in subparagraph D.

B. The compensation of the arbitrators

will be set as follows:

1. The fees and expenses of an arbitrator selected by the competent authority in

accordance with paragraph VIII will be

set at the amounts generally payable in the

Contracting State on the Date Arbitration

Proceedings Begin, provided that they do

not exceed the amounts set by the International Centre for Settlement of Investment

Disputes Schedule of Fees for arbitrators

in effect on the same date. The competent

authority may use this Schedule of Fees

(subject to any necessary modifications

as may relate to the maximum amount to

be paid, payment methods or currency exchange) to determine the fees and expenses of its selected arbitrator. This applies in

particular for hotel, meals, travel expenses, and incidental costs.

2. The fees and expenses of the Chair

will be the amounts set by the International Centre for Settlement of Investment

Disputes Schedule of Fees for arbitrators

in effect on the Date Arbitration Proceedings Begin (subject to any necessary modifications as may relate to the maximum

amount to be paid, payment methods or

currency exchange).

C. Neither competent authority will

charge any Concerned Person for costs associated with arbitration.

D. Unless otherwise decided by both

competent authorities, the competent authority to which a case giving rise to the

arbitration was initially presented will

be responsible for the logistical arrangements for any face-to-face meetings of

the arbitration panel and will provide the

administrative personnel necessary for the

support of such meetings. The administrative personnel so provided will report only

to the Chair concerning any matter related to that process. In the event that both

competent authorities have received a

MAP request, the competent authority the

970

actions of which resulted in taxation not

in accordance with the provisions of the

Convention will carry out the logistical

arrangements described in this subparagraph. The competent authority responsible for the logistical arrangements may

arrange meeting facilities in a location

that minimizes the panel’s travel time and

expenses. The competent authority may

arrange a meeting in the other’s meeting

facilities, as needed.

E. In general, each arbitrator will be

compensated for no more than seven days

of work on the arbitration (e.g., five days

of preparation and for two meeting days).

If the arbitrators feel they require additional time to properly consider the case,

the Chair will contact both competent authorities to request additional time. Both

competent authorities anticipate that panel members will be able to perform their

duties without the use of their staff. Both

competent authorities will not compensate

a staff member of an arbitrator.

F. As a general rule, both competent

authorities will encourage the arbitration

panel to complete their joint consideration

of the case through telecommunications.

The Chair will obtain approval from both

competent authorities prior to incurring

any expenses relating to a face-to-face

meeting.

XIII. Arbitration Panel Determination

A. Within 180 days after the appointment of the Chair (or, where subparagraph

J or K of paragraph VIII applies, unless

otherwise decided by both competent authorities, within 180 days after the selection of the new arbitrator), the Chair will

transmit the written determination of the

arbitration panel, concurrently to each

competent authority. This period may be

extended up to 270 days where subparagraph L of paragraph IX applies. Within

10 days after the receipt of the determination, the competent authority to which

the request for arbitration was submitted

will write to the presenter of the case to

request whether that person accepts the

determination.

B. In the event that the determination

has not been communicated to both competent authorities within the period provided for in subparagraph A, the competent authorities will consult to determine

Bulletin No. 2021–13

whether to extend the period for the arbitration panel to transmit a determination,

or to dismiss the panel and select new

arbitrators in accordance with paragraph

VIII.

C. Issues will be decided by the arbitrators in accordance with the Convention

and applicable rules of international law.

D. According to subparagraph (e) of

paragraph 7 of Article 25 of the Convention, unless the presenter of the case does

not accept the determination of the arbitration panel, such determination will constitute a resolution by mutual agreement

of the entire case under Article 25 of the

Convention at the time it is timely accepted by the presenter and be binding on both

Contracting States.

E. The resolution resulting from the

determination of the arbitration panel will

be implemented notwithstanding any time

limits or procedural limitations in the law

of the Contracting States, except such limitations as apply for the purposes of giving

effect to such a resolution.

F. The determination of the arbitration

panel will be decided on the basis of a majority vote.

G. The arbitration panel will not determine the treatment of any associated interest or penalties; rather that treatment will

be determined under the respective taxation laws of the Contracting States.

H. According to subparagraph (i) of

paragraph 14 of the Protocol of 2003:

1. The arbitration panel will deliver a

determination in writing to both competent authorities.

2. The determination of the arbitration

panel will be limited to one of the proposed resolutions submitted by the competent authorities for each adjustment or

similar issue and any threshold questions,

and will not include a rationale or any other explanation of the determination.

3. The determination of the arbitration

panel has no precedential value with respect to the application of the Convention

in any other case.

I. According to subparagraph (j) of

paragraph 14 of the Protocol of 2003:

1. Unless both competent authorities

decide to provide a longer time period,

the presenter of the case will have 45 days

after receiving the determination of the

arbitration panel to notify, in writing, the

competent authority to whom the case was

Bulletin No. 2021–13

presented, of his or her acceptance of the

determination.

2. If the presenter of the case fails to so

advise the relevant competent authority,

the determination will be considered not

to be accepted.

3. In the event the case is pending in

litigation or appeal, the determination of

the arbitration panel will be considered

not to be accepted by the presenter of the

case if any Concerned Person who is a

party to the litigation or appeal does not

advise, within the same time frame described above in clause 1, the relevant

court or administrative tribunal of its intention to withdraw from consideration

all issues resolved in the arbitration proceeding.

4. Where the determination of the arbitration panel is not accepted, the case will

be closed and will not be eligible for any

further consideration by the competent authorities.

XIV. Terminating Proceedings

A. According to subparagraph (c) of

paragraph 14 of the Protocol of 2003,

MAP, including the arbitration proceeding, with respect to a case will terminate

if at any time before the arbitration panel

delivers a determination to the competent

authorities:

1. the competent authorities have

reached a mutual agreement to resolve the

case pursuant to paragraph 2 of Article 25

of the Convention;

2. the presenter of the case has withdrawn its request for arbitration;

3. a decision concerning the case is rendered by a court or administrative tribunal

of one of the Contracting States during the

arbitration proceeding; or

4. if any Concerned Person or their

authorized representatives or agents willfully violates the written nondisclosure

statement required by subparagraph (b)

of paragraph 5 of Article 25 of the Convention, and both competent authorities

decide that such violation will result in the

termination of the arbitration proceeding.

B. If MAP, including the arbitration

proceeding, with respect to the case is

terminated under clause 2, 3 or 4 of subparagraph A, both competent authorities

will exchange letters to close the case unagreed.

971

C. At the termination of any proceeding each arbitrator will immediately destroy all documents or other information

received from either competent authority, or that otherwise reflect the considerations or discussions of the arbitration

panel, and delete all information that may

be stored on any computer, personal data

assistant or other electronic device or

media.

XV. Multiple Adjustments

A. According to subparagraph (f) of

paragraph 14 of the Protocol of 2003,

where an arbitration proceeding concerns

a case comprising multiple adjustments or

similar issues each requiring a disposition

of specific monetary amounts (for example, of income, profit, gains or expense)

or where specified, the maximum rate of

tax charged pursuant to the Convention,

the proposed resolution may propose a

separate disposition for each adjustment

or similar issue.

B. Unless both competent authorities

decide upon a different presentation to the

arbitration panel, the proposed resolution

and supporting position paper in such a

case will address each adjustment separately, within the overall page limitation.

C. The arbitration panel will make a

determination on each adjustment or similar issue separately. Thus, the final determination of the arbitration panel may be

comprised of a proposed resolution from

the competent authority on one adjustment and a proposed resolution from the

other competent authority on another adjustment.

XVI. Permanent Establishment,

Residency, and Other Threshold

Questions

A. According to subparagraph (e) of

paragraph 14 of the Protocol of 2003, in

the case of an arbitration proceeding concerning:

1. the taxation of an individual with respect to whom the competent authorities

have been unable to reach an agreement

regarding the Contracting State of which

the individual is a resident;

2. the taxation of the business profits

of an enterprise with respect to which the

competent authorities have been unable to

March 29, 2021

reach an agreement on whether a permanent establishment exists; or

3. such other issues the determination

of which are contingent on resolution of

similar threshold questions;

then the competent authorities may

submit proposed resolutions separately addressing the relevant threshold questions as

described in clause 1, 2 or 3 above (for example, the question of whether a permanent

establishment exists), and the contingent

determinations (for example, the determination of the amount of profit attributable

to such permanent establishment).

B. In such a case, the competent authority is allowed to submit a proposed resolution and supporting position paper which

will address each issue separately, taking

alternative positions as appropriate. For example, the competent authority is allowed

to take a position that no permanent establishment exists in one proposed resolution,

and to propose an amount of business profit

to be attributable to a permanent establishment in another proposed resolution in case

the arbitration panel determines that a permanent establishment exists.

C. The arbitration panel will make a determination on the threshold question and

the contingent determination separately.

XVII. Date Arbitration Proceedings

Begin for Advance Pricing

Arrangement (“APA”) Case

A. According to subparagraph (d) of

paragraph 7 of Article 25 of the Conven-

tion, the Date Arbitration Proceedings

Begin with respect to a case that is the

subject of a request for an APA is the later of:

1. six months after an official notification has been issued by the tax authority

of either Contracting State of a correction

of, or an intent to adjust, the pricing of a

transaction or transfer covered by a request for an APA regarding a Concerned

Person, unless both competent authorities have decided on a different date and

notified the presenter of the case of such

decision; and

2. the earliest date on which both competent authorities have received a request

for arbitration in subparagraph B of paragraph V accompanied with all necessary

attachments as described in subparagraph

C of that paragraph.

B. However, the arbitration proceeding

will not begin any earlier than two years

after the date on which the information

necessary to undertake substantive consideration for a mutual agreement on the

APA has been received by both competent

authorities.

C. The “date on which the information necessary to undertake substantive

consideration for a mutual agreement on

the APA has been received by both competent authorities” in subparagraph B

means the date on which the first position

papers regarding the APA case have been

exchanged between the competent authorities.

XVIII. Timeframes

A. Notwithstanding the above paragraphs, in an exceptional case both competent authorities may decide to utilize

different procedural periods.

B. Both competent authorities will

confirm the period so extended and notify

the Concerned Person in each Contracting

States of that extended period in writing.

XIX. Miscellaneous

In computing the days necessary for an

action in this Arrangement, the day when

the event beginning this computation occurred will not be counted.

XX. Coordination with Protocol Entry

into Force

A. This Arrangement applies to any

request for arbitration made pursuant to

paragraph 5 of Article 25 of the Convention on or after August 30, 2019.

B. Notwithstanding subparagraphs A

and B of paragraph IV, the Commencement Date for a MAP case that was already under consideration by the competent authorities as of August 30, 2019 will

be August 30, 2019 (See paragraph 3 of

Article XV of the Protocol amending the

Convention signed at Washington on 24

January 2013).

C. Both competent authorities may

modify or supplement this Arrangement

by an exchange of letters between them.

For the Competent Authority of Japan

For the Competent Authority of the United States of America

KOMIYA Atsushi

Deputy Commissioner

International Affairs

National Tax Agency

Douglas W. O’Donnell

Commissioner,

Large Business and International Division

Internal Revenue Service

Date:

Date:

March 29, 2021

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Bulletin No. 2021–13

Attachment 1 - Formats in the United States

1-1: Taxpayer Request for MAP Arbitration and Nondisclosure Statement

1-2: Nondisclosure Statement of Taxpayer’s Authorized Representative

1-3: Taxpayer Authorization to Disclose Tax Information for Purposes of Treaty MAP Arbitration Proceedings

1-4: Declaration of Arbitrator

Attachment 2 - Formats in Japan

2-1: Nondisclosure Statement of Taxpayer and Taxpayer’s Authorized Representative (English translation – Japanese

text can be found at https://www.irs.gov/pub/irs-utl/US-Japan%20Arbitration%20Implementation%20Arrangement%201.pdf)

2-2: Sample Contract between the National Tax Agency and Arbitrator (Clauses Regarding Confidentiality) (Japanese

text omitted and can be found at https://www.irs.gov/pub/irs-utl/US-Japan%20Arbitration%20Implementation%20Arrangement%201.pdf)

Bulletin No. 2021–13

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Attachment 1-1

TAXPAYER 【[】REQUEST FOR MAP ARBITRATION AND【]1】 NONDISCLOSURE STATEMENT

__________________________________________________________________________________________________________

NAME OF TAXPAYER

__________________________________________________________________________________________________________

ADDRESS

__________________________________________________________________________________________________________

CITY

STATE

COUNTRY

POSTAL CODE (ZIP CODE)

The above-named taxpayer hereby [requests and] consents to the competent authorities of the United States and Japan undertaking an

arbitration proceeding described in paragraphs 5, 6 and 7 of Article 25 (Mutual Agreement Procedure) of the Convention between the

Government of Japan and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention

of Fiscal Evasion with respect to Taxes on Income signed at Washington on 6 November 2003 as amended by the Protocol signed

at Washington on 24 January 2013 and paragraph 14 of the Protocol signed at Washington on 6 November 2003 as amended by the

Protocol signed at Washington on 24 January 2013, as necessary in order to reach a mutual agreement under Article 25 regarding the

request filed with the [United States/Japanese] Competent Authority on [date] .

This consent and nondisclosure statement also covers the following concerned persons2 that the taxpayer has the legal authority to

bind:

[Enter name and address of each such concerned person. If none, enter “Not Applicable.”]

The following concerned persons, if any, are not covered by this consent and nondisclosure statement (and therefore must submit a

separate consent and nondisclosure statement on their own behalf):

[Enter name and address of each such concerned person. If none, enter “Not Applicable.”]

In making this consent, the taxpayer and, if applicable, each of the concerned persons covered by this consent and nondisclosure statement, agrees not to disclose to any person (other than the taxpayer’s authorized representative or agent, another concerned person,

its authorized representative or agent, or one of the competent authorities or its authorized representative3) any information received

during the course of the arbitration proceeding from either Contracting State or the arbitration panel, other than the determination of

such panel.

The following persons are all of the representatives or agents of the taxpayer or, if applicable, the specified concerned person, who

have been authorized to assist the taxpayer or specified concerned person in the mutual agreement procedure to which this consent

and nondisclosure statement applies. Attached to this consent and nondisclosure statement are the nondisclosure statements of each

of these representatives and agents, as is required by paragraph 5 of Article 25 of the above-mentioned Convention.

[Enter name and address of each such representative or agent and the concerned person(s) for which each is acting. If none, enter

“Not Applicable.”]

The information, positions, arguments, or analyses contained in any position paper submitted for consideration of the arbitration

panel will be previously presented, and any annexes to such position paper will be documents previously made available, to both

competent authorities for their consideration during negotiations prior to the beginning of arbitration.

A taxpayer may make a request for MAP arbitration in a separate letter, but must make its nondisclosure statement in this form.

As defined in the relevant treaty provisions, the term "concerned person" means the taxpayer requesting mutual agreement procedure assistance from a competent authority under Article 25

and any other person whose tax liability to either the United States or Japan may be directly affected by the mutual agreement arising from that request. A concerned person that has the legal

authority to bind any other concerned person(s) on this matter may do so in a comprehensive statement.

3

The U.S. Competent Authority has authorized the International Centre for Dispute Resolution (ICDR), a division of the American Arbitration Association, to act on its behalf with respect to

certain designated matters concerning the arbitration proceeding.

1

2

March 29, 2021

974

Bulletin No. 2021–13

[Under penalties of perjury]4, I declare that I have examined this consent and nondisclosure statement and any accompanying attachments and to the best of my knowledge and belief, they are true, correct, and complete. Furthermore, I certify that I have the legal

authority to execute this consent and nondisclosure statement on behalf of each concerned person covered by it and to bind each

concerned person to its terms.

__________________

Date

_________________________________________

Signature

__________________________________________

Printed Name

__________________________________________

Position

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975

March 29, 2021

Attachment 1-2

NONDISCLOSURE STATEMENT OF TAXPAYER’S AUTHORIZED REPRESENTATIVE

I hereby agree that neither I nor any member of my firm’s office staff nor any other person who may assist me or the firm in the

mutual agreement proceeding requested in the letter of [date] submitted by [name of taxpayer] to the competent authorities of the

United States and Japan will disclose to any person (other than the taxpayer, another concerned person,5 its authorized representative

or agent, or one of the competent authorities or its authorized representative6) any information received during the course of the arbitration proceeding from either Contracting State or the arbitration panel, other than the determination of such panel.

__________________

Date

_________________________________________

Signature

__________________________________________

Printed Name

__________________________________________

Position

As defined in the relevant treaty provisions, the term "concerned person" means the taxpayer requesting mutual agreement procedure assistance from a competent authority under Article 25

of the Convention between the Government of Japan and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with

respect to Taxes on Income and any other person whose tax liability to either the United States or Japan may be directly affected by the mutual agreement arising from that request.

6

The U.S. Competent Authority has authorized the International Centre for Dispute Resolution (ICDR), a division of the American Arbitration Association to act on its behalf with respect to

certain designated matters concerning the arbitration proceeding.

5

March 29, 2021

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Bulletin No. 2021–13

Attachment 1-3

TAXPAYER AUTHORIZATION TO DISCLOSE TAX INFORMATION FOR PURPOSES OF TREATY MAP

ARBITRATION PROCEEDINGS

__________________________________________________________________________________________________________

NAME OF TAXPAYER

__________________________________________________________________________________________________________

U.S. TAX IDENTIFICATION NUMBER (e.g., EIN)

__________________________________________________________________________________________________________

ADDRESS

__________________________________________________________________________________________________________

CITY

STATE

COUNTRY

POSTAL CODE (ZIP CODE)

The above-named taxpayer, in accordance with its request of [date] that the competent authorities of the United States and Japan

undertake an arbitration proceeding described in paragraphs 5, 6 and 7 of Article 25 of the Convention between the Government of

Japan and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed at Washington on 6 November 2003 as amended by the Protocol signed at Washington

on 24 January 2013 and paragraph 14 of the Protocol signed at Washington on 6 November 2003 as amended by the Protocol signed

at Washington on 24 January 2013, consents to the disclosure by the competent authorities of Japan and the United States of any and

all returns and return information with respect to the taxpayer’s mutual agreement procedure (MAP) request submitted to the competent authorities on [date] , to the individuals appointed (or identified for potential appointment pending clearance) by the respective

competent authorities to arbitrate the MAP case, the individual appointed (or identified for potential appointment pending clearance)

as the Chair of the arbitration panel, and the following representatives, if any, of the respective competent authorities who are authorized by the competent authority to act on its behalf with respect to certain designated matters concerning the arbitration proceeding:

In the case of the United States: I nternational Centre for Dispute Resolution (ICDR), a division of the American Arbitration

Association

In the case of Japan: _____________________________________________________________________________________.

In the case of a consolidated group of U.S. corporations, this consent is made in regard to all such information concerning the following members of the consolidated group, who are the subjects of the mutual agreement request:

[Enter name and address of each consolidated group member, if any, who is a concerned person.7 If none, enter “Not Applicable.”]

I certify that I have the legal authority to execute a request for or consent to disclose a return or return information to disclose information to third parties (as described in Treas. Reg. §301.6103(c)-1(e)(4)) and I hereby make this consent on behalf of the taxpayer,

including each of the members of the consolidated group listed above.8

__________________

Date

_________________________________________

Signature

__________________________________________

Printed Name

__________________________________________

Position

As defined in the relevant treaty provisions, the term "concerned person" means the taxpayer requesting mutual agreement procedure assistance from a competent authority under Article 25

and any other person whose tax liability to either the United States or Japan may be directly affected by the mutual agreement arising from that request.

8

Each taxpayer or concerned person (as defined in footnote 1) whose U.S. tax liability may be directly affected by the mutual agreement procedure request must sign a consent. In the case

of a consolidated group (as defined in Treas. Reg. 1.1502-1(h)), a person authorized by law to act for the common parent should execute the consent on behalf of the group. See Treas. Reg.

§1.1502-77(a).

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Attachment 1-4

Declaration of Arbitrator

In the matter of the Mutual Agreement Procedure case under Article 25 of the Convention between the Government of Japan and the

Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect

to Taxes on Income (“Convention”) involving the following Concerned Persons:

[Names and Addresses of taxpayers that will be directly affected by the decision]

Paragraphs 5, 6 and 7 of Article 25 (Mutual Agreement Procedure) of the Convention, paragraph 14 of the Protocol of 2003 to that

Convention, and the Implementing Arrangement between the Competent Authorities of Japan and The United States (Implementing

Arrangement), provide rules and procedures under which the Japan – U.S. arbitration process (the Proceeding) will operate.

I certify that I can serve impartially in this case, meet the conditions of paragraph VII.A of the Implementing Arrangement at this

time, and shall remain independent of the Contracting States and Concerned Persons during the entire arbitration proceeding and for

a reasonable period of time thereafter.

Past or existing facts or circumstances that might be likely to give rise to justifiable doubts as to my impartiality or independence, if

any, are identified in an Attachment to this Declaration.

Notwithstanding such relationships and interests, if any, I believe that I can be impartial and can exercise independent judgment in

making my decisions in the Proceeding and thus to the best of my knowledge and belief, there is no reason why I should not serve

as an Arbitrator with respect to the above-noted case. If, at any stage during the Proceeding, any new fact or circumstance arises that

might give rise to such doubts, I shall promptly disclose such fact or circumstance to both competent authorities.

I understand that with regard to any information received from International Centre for Dispute Resolution, a division of the American Arbitration Association, the Japan National Tax Agency, and the U.S. Internal Revenue Service in connection with the Proceeding, I and my staff, if any, are considered to be among the “persons or authorities” involved in the administration of taxes covered

by Article 26 (Exchange of Information) of the Convention. I and my staff agree to abide by and be subject to the confidentiality and

nondisclosure provisions of Articles 25[MAP] and 26[EOI] of the Convention and the applicable domestic laws of Japan and the

United States concerning the confidentiality of tax information. In the event those provisions conflict, the most restrictive condition

shall apply. I confirm that I have the legal authority to bind my staff in this matter and will ensure they are aware of their obligations

regarding confidentiality and nondisclosure. In particular, I agree that I may not disclose any information relating to the Proceeding,

except as permitted by the Convention and the domestic laws of Japan and the United States. In addition, all material received and

prepared in the course of, or relating to the Proceeding shall be considered to be information exchanged between Japan and the United

States and shall be destroyed in accordance with paragraph XIV.C of the Implementing Arrangement referenced above.

[Under penalties of perjury9], I hereby accept appointment as an Arbitrator in this case, and will fairly decide the matters in controversy between the Competent Authorities of Japan and the United States in accordance with the Convention and the related agreements referred to above. I declare that these statements and any accompanying attachments are, to the best of my knowledge and

belief, true, correct, and complete.

__________________

Date

_________________________________________

Signature

__________________________________________

Printed Name

_________________________________________

Address

Sworn before me this __________ day of ________, 20___

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Attachment 2-1 (English Translation)

* This is the English translation of the original Japanese Nondisclosure Statement. This English translation is provided for information purpose only.

NONDISCLOSURE STATEMENT

I hereby promise not to disclose to any person (except other concerned persons that means the presenter of the case to a competent authority and all other persons, if any, whose tax liability to either Contracting State may be directly affected by a mutual

agreement) any information received during the course of the arbitration proceeding from the either competent authorities or the

arbitration panel, other than the determination of such panel.

Signature of the Person Who Request for Arbitration

Date

Signature of the Representative of the Consolidated Subsidiary

Date

Signature of the Authorized Representative or Agent of above

Date

Instructions for Nondisclosure Statement

1. This form is used when the person who requested for mutual agreement procedure requests for arbitration and the person and his/

her authorized representatives or agents are required not to disclose any information received during the course of the arbitration

proceeding under the provision of the applicable Tax Convention.

2. Upon promising not to disclose any information, this form must be submitted with the Request for Arbitration to the Office of

Mutual Agreement Procedures of the National Tax Agency.

3. After having read the printed contents of the statement, the person who signs this form must fill in each column as follows:

(1) The person who requests for arbitration (where the person is a corporation, the representative of the corporation) must sign his/

her name in the column “Signature of the Person Who Request for Arbitration”.

(2) Where the request for arbitration concerns transactions of the consolidated subsidiary of the person who requests for arbitration,

the representative of the consolidated subsidiary must sign his/her name in the column “Signature of the Representative of the Consolidated Subsidiary”.

(3) Where the person who requests for arbitration (if the request for arbitration concerns transactions of the consolidated subsidiary,

the person who requests for arbitration or that consolidated subsidiary) has submitted Authorization of the Tax Representation for

mutual agreement procedure, the authorized representative for mutual agreement procedure (where the authorized representative is

a corporation, the representative of the corporation) must sign in the column “Signature of the Authorized Representative or Agent

of above”.

(4) Where there are two or more consolidated subsidiaries in (2) or authorized representatives in (3), please submit their statements

with their signatures in a separate sheet.

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Attachment 2-2

[Japanese text omitted]

Sample Contract between the National Tax Agency and Arbitrator

(Clauses Regarding Confidentiality)

______ (the responsible officer for this contract for the National Tax Agency, hereinafter referred to as “X”) and ______ (an arbitrator, hereinafter referred to as “Y”) enter into this contract regarding the duties of an arbitration panel for a mutual agreement procedure case under paragraph 5, 6 and 7 of Article 25 of the Convention between the Government of Japan and the Government of the

United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

(hereinafter referred to as the “Duties of Arbitration Panel”) as follows.

Article…(Definitions)

The “Confidential Information” referred to in this contract means any information which X discloses to Y in connection with the

Duties of Arbitration Panel regardless of the format of the medium through which it is disclosed.

Article… (Confidentiality)

1 Y shall keep Confidential Information confidential.

2 Y may not use Confidential Information for a purpose other than the Duties of Arbitration Panel, nor may Y disclose Confidential Information to, or allow it to be used by, a third party other than other arbitrators who belong to the arbitration panel or a

person who helps Y perform the Duties of Arbitration Panel (hereinafter referred to as “Y’s Staff”).

3 Y may not make a copy of Confidential Information for a purpose other than the Duties of Arbitration Panel.

4 Y shall make Y’s Staff comply with the obligations prescribed in this article.

5 Where there arises a possibility of the leakage of the Confidential Information, regardless of the cause, Y shall immediately

inform X of this fact and follow X’s instructions on how to deal with the situation.

6 Immediately after the completion of the Duties of Arbitration Panel or the termination of this contract, Y shall return all media

containing Confidential Information (including any copy or reproduction of the media and any summary or excerpt of Confidential Information) that Y has received or created in connection with the Duties of Arbitration Panel and delete all information that

may be stored on any computer, electronic device or media.

7 The provisions of this article shall survive after the termination of this contract.

Article…(Penalties for breach of contract and compensation for damages)

1 Where Y or Y’s Staff violates an obligation prescribed in this contract, X may file a claim against Y for the amount equal to the

contract amount set forth in this contract, as a penalty for breach of contract.

2 Where damages are caused on X or the National Tax Agency which includes all or any organization that belongs to the body of

the National Tax Agency such as regional taxation bureaus and tax offices (hereinafter collectively referred to as the “National

Tax Agency”) by a cause to which Y or Y’s Staff is responsible, Y shall compensate X for all such damage, in addition to paying

the penalty referred to in paragraph 1.

3 The damages referred to in paragraph 2 include any amount that the National Tax Agency is ordered to pay as a result of a

claim, court proceedings, appeal, etc. (hereinafter collectively referred to as a “Claim”) initiated by a taxpayer or a related party

of the taxpayer in connection with the mutual agreement procedure case subject to arbitration procedure and all expenses required in order for the National Tax Agency to respond to such Claim.

Article… (Cancellation of the contract)

X may cancel this contract at any time without any prior notice if Y violates the obligations prescribed in this contract or if X

finds there is a significant obstacle for Y’s fulfillment of Y’s contractual obligations.

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Article… (Prohibition against the transfer of rights and obligations)

Y may not transfer or assign the rights and obligations under this contract to a third party in a whole or in part, nor may Y make

rights and obligations under this contract subject to the rights of a third party in whole or in part (including, but not limited to

mortgaging such rights and obligations).

Article… (Prohibition against subcontracting and entrustment)

1 Y may not subcontract or entrust the Duties of Arbitration Panel to a third party in whole or in part.

2 With prior written consent from X, Y may use Y’s Staff to perform the Duties of Arbitration Panel. In such a case, Y is fully

liable to X for the conduct of Y’s Staff.

Article… (Resolution of Disputes)

Any dispute arising out of or in relation to this contract goes before the Tokyo District Court as the court of exclusive jurisdiction

in the first trial.

Article… (Applicable laws)

This contract is governed by, and is interpreted and executed in accordance with, Japanese laws.

Article… (Language)

The original copy of this contract means the original copy that has been drawn up in the Japanese language. Any translation of

the original copy of this contract into another language is a duplicate, and is not legally binding.

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Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

­effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus, if

an earlier ruling held that a principle applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is being made clear because the language has

caused, or may cause, some confusion. It

is not used where a position in a prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations to

show that the previous published rulings

will not be applied pending some future

action such as the issuance of new or

amended regulations, the outcome of cases in litigation, or the outcome of a Service study.

Abbreviations

The following abbreviations in current use

and formerly used will appear in material

published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2021–13

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

March 29, 2021

Numerical Finding List1

Revenue Rulings:—Continued

Bulletin 2021–13

2021-05, 2021-10 I.R.B. 896

2021-06, 2021-12 I.R.B. 946

Announcements:

2021-01, 2021-04 I.R.B. 506

2021-02, 2021-08 I.R.B. 892

2021-03, 2021-08 I.R.B. 892

2021-04, 2021-09 I.R.B. 895

2021-05, 2021-13 I.R.B. 965

Notices:

2021-01, 2021-02 I.R.B. 315

2021-03, 2021-02 I.R.B. 316

2021-04, 2021-02 I.R.B. 319

2021-02, 2021-03 I.R.B. 478

2021-05, 2021-03 I.R.B. 479

2021-07, 2021-03 I.R.B. 482

2021-09, 2021-05 I.R.B. 678

2021-06, 2021-06 I.R.B. 822

2021-08, 2021-06 I.R.B. 823

2021-11, 2021-06 I.R.B. 827

2021-12, 2021-06 I.R.B. 828

2021-13, 2021-06 I.R.B. 832

2021-10, 2021-07 I.R.B. 888

2021-15, 2021-10 I.R.B. 898

2021-16, 2021-10 I.R.B. 907

2021-18, 2021-11 I.R.B. 911

2021-19, 2021-11 I.R.B. 920

2021-20, 2021-11 I.R.B. 922

Treasury Decisions:

9925, 2021-02 I.R.B. 296

9940, 2021-02 I.R.B. 311

9932, 2021-03 I.R.B. 345

9939, 2021-03 I.R.B. 376

9941, 2021-03 I.R.B. 396

9942, 2021-03 I.R.B. 450

9937, 2021-04 I.R.B. 495

9936, 2021-05 I.R.B. 508

9943, 2021-05 I.R.B. 577

9945, 2021-05 I.R.B. 627

9946, 2021-06 I.R.B. 726

9947, 2021-06 I.R.B. 748

9948, 2021-06 I.R.B. 801

9938, 2021-07 I.R.B. 838

Proposed Regulations:

REG-130081-19, 2021-02 I.R.B. 321

REG-114615-16, 2021-03 I.R.B. 489

REG-111950-20, 2021-05 I.R.B. 683

REG-115057-20, 2021-05 I.R.B. 714

Revenue Procedures:

2021-01, 2020-01 I.R.B. 1

2021-02, 2020-01 I.R.B. 116

2021-03, 2020-01 I.R.B. 140

2021-04, 2020-01 I.R.B. 157

2021-05, 2020-01 I.R.B. 250

2021-07, 2020-01 I.R.B. 290

2021-09, 2020-03 I.R.B. 485

2021-08, 2020-04 I.R.B. 502

2021-10, 2020-04 I.R.B. 503

2021-12, 2020-05 I.R.B. 681

2021-11, 2020-06 I.R.B. 833

2021-15, 2020-08 I.R.B. 891

Revenue Rulings:

2021-01, 2021-02 I.R.B. 294

2021-02, 2021-04 I.R.B. 495

2021-03, 2021-05 I.R.B. 674

2021-04, 2021-06 I.R.B. 724

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin

2020–52, dated December 27, 2020.

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Bulletin No. 2021–13

Finding List of Current Actions on

Previously Published Items1

Bulletin 2021–13

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin

2020–52, dated December 27, 2020.

1

Bulletin No. 2021–13

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March 29, 2021

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue

Bulletins are available at www.irs.gov/irb/.

We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,

we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page

www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.

NW, IR-6230 Washington, DC 20224.