Multidisciplinary Japanese and Filipino Experts
KPMG’s Global Japanese Practice spans 88 major cities and comprises over 800 professionals, both Japanese nationals and other staff proficient in Japanese. As part of this extensive network, KPMG in the Philippines’ Japan Desk is committed to helping Japanese companies successfully start, develop, and expand their businesses while adapting to changing market conditions and local regulatory requirements.
In the Japanese version, please correct the numbers in the following sections from 38 to 32 and from 91 to 88.
Audit and Assurance
| Financial Statement Audit (Local statutory audit) | Accounting audit is required by the Corporation Code of the Philippines. ➦ There is an audit obligation if the company has total assets/debts of more than Php 600,000.00. This means that this is applicable to most of the Japanese companies. ➦ Fiscal year generally pertains to a calendar year. However, a different year end may be used at the company’s discretion. ➦ There are reporting obligations for the Bureau of Internal Revenue (BIR) within 105 days and for the Securities and Exchange Commission (SEC) within 120 days from the end of the fiscal year. ➦ Preparing the financial statement in accordance with the Philippine Financial Reporting Standards (PFRS) that complies with the International Financial Reporting Standards (IFRS). PFRS provides a standard for small and medium-sized entities, and simplified declarations are allowed by following this. |
| Quarterly review | We provide a voluntary review left to the company’s discretion. This is a simpler procedure compared to statutory audit. Thus, most of Japanese companies in the Philippines choose not to prepare this report unless required by their parent company. |
| Other reviews | These are reviews conducted for a specific period upon a company’s request. |
| Agreed upon procedures (AUP) | We help prepare specified procedures based on agreement. |
| Audit for capital increase | We provide issuance of a mandatory audited report when a company increases their authorized capital in the Philippines. The auditor in charge of financial statement audit will conduct this, normally. |
| Audit for functional currency | We provide mandatory audit for companies that change their currency from Philippine Pesos (PHP) to their functional currency. The auditor who is in charge of financial statement audit usually conducts this. |
Tax
| Tax retainer | We provide general advisory services for tax concerns reflecting the unique needs of Japanese clients relating to their daily operations. Consultation beyond the scope of this service, such as tax investigation response and detailed study for individual matters (tax due diligence in M&A) will be contracted separately. Basically, this contract is good for one year with fixed monthly compensation. |
| Assistance for tax investigation | This is an assistance service for when a company faces a tax audit investigation. We assist in the tax investigation and consider countermeasures, including the representation of the company before the BIR. The tax audit process is complex, and the BIR usually includes many items of assessment which a taxpayer needs to address. This service supports the company in opposing the BIR and raising the proper defenses against the items of assessment. The early involvement of tax professionals is key to the successful cancellation or reduction of the amount of the assessment. |
| Tax compliance review | We review the company’s compliance with the Tax laws and regulations. This covers all internal revenue taxes such as income tax, value added taxes, withholding taxes, documentary stamp tax, as well as local business tax and real property tax. The purpose of this is to manage tax risk and to keep the transparency of the tax preparation process. This contract covers one taxable year. |
| Tax Advisory (Tax opinion, Tax study, Inquiry) | This service is an individual response to a client’s specific project that will be implemented or is planned to be implemented. For clients who have plans to expand their business in the Philippines, we provide investment advice and inform them of the available tax incentives and provide a professional opinion report. |
| Tax due diligence | Here, we compute the company’s value in tax aspects and judge based on the potential tax risk and/or tax structure of the company. Mostly, it includes computing the possible tax risks involved in a Japanese company takeover of a Philippine company. In addition, we support a company’s investment decision with our in-depth knowledge and provide flexible advisory service in line with company needs. |
| Tax structuring | We provide Tax structuring services for acquisition and/or business realignment. Philippine investments may include the establishment of subsidiaries/joint ventures and the acquisition of local companies. Additionally, there are many investment options for tax savings such as leveraging tax incentives under the Philippine Tax Code and establishing a company through tax treaty countries. Among them, this service provides the company’s own tax structuring while considering tax cost and plan. |
| Transfer pricing documentation /study | We assist with transfer pricing documents required by the BIR, or with analyzing transaction/profit rate. ➦ We recommend that if a company has related party transactions, it should have transfer pricing documentation. ➦ Proving that the transaction price with the related company is reasonable. |
| Assistance for tax treaty relief application (TTRA) | We help with the preparation of the Tax Treaty Relief Application (TTRA) for purposes of availing preferential tax treatment under existing tax treaties. Depending on the tax treaty relief applied for, this may involve simple documentation or the preparation of several documents. |
| Company set up | We support with the establishment of a company, branch or representative office. ➦ Required procedure for establishing a company in accordance with form of the company ➦ Procedure of administration agencies such as SEC, BIR and Philippine Economic Zone Authority (PEZA) ➦ Procedure of administration agencies such as SEC, BIR and Philippine Economic Zone Authority (PEZA) ➦ Proposal for business scheme We assist with the flow of setting up a company such as SEC application for license issuance, obtaining business permits from the Local Government Unit (LGU) and registering to the BIR and PEZA, afterwards. |
| Global Mobility Service (GMS) | This is a yearly contract for computing and filing of individual income tax for Japanese expatriates in the Philippines. We provide one-on-one counseling through phone or e-mail. Due to the widening income gap in the Philippines, this is an essential service for protecting the security of individuals and the company. |
| VAT refund assistance | We assist with the filing of application for VAT refund. |
| Assistance for change of company name | We help in the SEC procedure of changing a company name. |
| Tax filing (Corporate income tax and VAT and other taxes) | In compliance with the Tax Code of the Philippines, we compute the tax obligation and provide the corporate income form. This applies to quarterly/annual corporate income filing, monthly withholding tax filing and monthly/quarterly VAT filing, and other tax types, depending on the BIR registration of the company. |
| Tax filing on the transfer of shares of stock | We compute the Capital Gain Tax (CGT) and Documentary Stamp Tax (DST) preparation, filing and payment of tax returns. The service includes obtaining the Certificate Authorizing Registration (CAR) which is needed to transfer the shares in the stock and transfer book of the company. |
| Tax filing (DST) | We help in computing the stamp duty and providing the filing form for transactions subject to DST. |
Advisory
| Financial due diligence | We conduct this service with the aim of deepening the understanding of the situation of the targeted company/business from a financial point of view and identifying and evaluating various risk factors related to deals. |
| Internal audit | This internal audit service is conducted by the request of a parent company in Japan and report the results. |
| Process review | After reviewing the financial report or another duty, we propose the improvement and provide the support and training including Project Management Office (PMO) duties. When the company is established, we can assist with document processing for business operations. |
| Business due diligence | When a company has plans to merge or acquire, we examine the past and current risks of a targeted company from an accounting/financial perspective. |
| Financial advisor | This is to lead your M&A successfully by selecting a targeted company, considering the scheme, evaluating business value and assisting with negotiation/contract signing. |
| Valuation | In M&A or organization restructuring, we provide various value evaluation services with an external perspective and support your decision. Furthermore, we also provide Purchase Price Allocation (PPA) and/or intangible assets perspective for required accounting treatments after the acquisition. |
| Financial modeling/review | We consider the investment value for buyers. This is not only for considering the business plan submitted by the targeted company, but also for providing the supporting service related to it, analyzing synergy and preparing the financial model based on the sight of buyer’s company, if needed. |
| Market analysis | We provide market scale and potential analysis. It is often conducted with a consistent feasibility study when entering a new business. |
| Forensic | We provide risk management services such as current diagnosis, system planning, introduction support and survey/audit/training. Moreover, our experts will provide suitable advices for issues relating to misconduct/deception. |
| IT system review | We ensure proper project management to lead the success of system implementation and review projects and internal controls in real time across all phases of the project to achieve effective and efficient control of new businesses and systems. |
Technology Consulting
| Cyber Security | KPMG has moved cybersecurity to the heart of our business – it has been one of the prime areas of focus for us. Our Cybersecurity practice consists of a global team of more than 3,000 talented professionals dedicated to cybersecurity in more than 75 countries around the world. We provide end-to-end cyber security services demonstrated in four pillars; ➦ Strategy & Governance – we help clients prevent cyber threats by understand how best to align their cyber agenda with their dynamic business and compliance priorities; ➦ Transformation – we help clients improve their cyber posture by building and improving their programs and process supported by the right organization and technology to improve their cyber agenda; ➦ Cyber Defense – we help clients detect cyber threats and maintain their cyber agenda as their business and technology programs evolve by providing greater visibility and understanding of changing risks; and ➦ Cyber Response – we help clients to effectively and efficiently respond to cyber incidents and conduct forensic analysis and details investigation |
| Data Privacy Advisory Services | KPMG’s data privacy practice consists of a global team of more than 1,000 talented professionals in more than 75 countries around the globe, with considerable experience in privacy governance framework, personnel training, privacy impact assessment, gap assessment, risk management, policy-making and implementation strategies, breach simulation and readiness and regulatory notification requirements while ensuring adherence to mature and timely methodologies to support clients with a diverse variety of compliance and operation challenges. |
| Cloud Transformation | Cloud is fundamentally changing all aspects of the digital business ecosystem. Our Cloud transformation Services helps clients identify business and market control requirements, then assess, design, implement, operate, or audit their cloud environments to manage infrastructure in order to achieve compliance. Our services are based on our hands-on experience designing, configuring, and validating industry specific controls for leading cloud platforms and digital transformation initiatives. With cloud transformation services, we enable clients to become digitally “powered” and “connected’. |
| Data and Analytics | The ability to harness data is a powerful business tool. With the rise of data and analytics (D&A), businesses must proactively manage, protect, transform and communicate data to make intelligent decisions. D&A not only helps optimize an organization’s overall performance, it also significantly affects the business decisions. With the current fast-paced business landscape, D&A can optimize operations, improve customer experience, add value, identify opportunities for growth and streamline costs while aiding business leaders make sound decisions across all aspects in an organization. For more details, check https://home.kpmg/ph/en/home/services/advisory/it-advisory-services/data-and-analytics.html. |
| Intelligent Automation | We use our global network, a wealth of experience with cross-border systems and our knowledge of trailblazing cases to provide services, such as RPA diagnosis and configuration, in order to power up and complement your processes. Low-code platforms to create sophisticated enterprise-class applications that incorporate complex business logic, automate workflow, integrate existing information systems, and enable a slick user experience. |
Key Contacts
Oliver C. Bucao
Arik Aaron C. Abu
Yuki Maekawa
Atsushi Harada