Cross-Border Tax Structuring and Valuation Optimization in Energy-Sector M&A: A U.S.-Japan Perspective

• Author(s): Rikuto Shiraishi ; Munashe Naphtali Mupa
• Paper ID: 1708245
• Page: 126-135
• Published Date: 06-05-2025
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 8 Issue 11 May-2025

Abstract

This study explores the interplay among tax structuring and valuation optimization in U.S.–Japan cross-border energy M&A. The paper analyzes regulatory frameworks, case studies, and emerging trends, identifying the main challenges of regulatory frameworks surrounding transfer pricing, permanent establishment risks, and applicable minimum tax rates toward the tax treatment of intangible assets in energy deals. The research illuminates how the TCJA provisions and all-too-typical compliance processes in the U.S. contrast with Japan’s CFC rules and proficient digital tax administration, offering both possibilities and risks for dealmakers. The study takes this a step further by demonstrating how differences in carbon pricing mechanisms, tax credit eligibility, and how technology is valued can all play a large role in determining the economics of a deal through a comparative analysis of renewable energy and shale gas transactions. The paper provides practical strategies to optimize tax via hybrid entity structures, bilateral advance pricing agreements, and debt-equity balancing to bypass thin capitalization rules. Findings reinforce the relevance of digital compliance tools and predict their impact on the structuring of transactions due to global minimum tax rules. This study contributes to the literature by articulating a general, comprehensive framework for the valuation issues that are particular to the energy sector and the energy sector M&A and by providing actionable recommendations to practitioners dealing with the U.S.-Japan regulatory environment. The research calls out the criticality of developing adaptive tax planning methodologies that consider changes in both jurisdictions' evolving policy settings and enforcement priorities in light of the transition of energy markets towards renewables and growing geopolitical uncertainty.

Citations

IRE Journals:
Rikuto Shiraishi , Munashe Naphtali Mupa "Cross-Border Tax Structuring and Valuation Optimization in Energy-Sector M&A: A U.S.-Japan Perspective" Iconic Research And Engineering Journals Volume 8 Issue 11 2025 Page 126-135

IEEE:
Rikuto Shiraishi , Munashe Naphtali Mupa "Cross-Border Tax Structuring and Valuation Optimization in Energy-Sector M&A: A U.S.-Japan Perspective" Iconic Research And Engineering Journals, 8(11)