I would say this is a great victory for both global custodians and Japanese subcustodians who worked closely to fend off NTA’s demand to disclose ultimate beneficiaries.
We both knew that NTA wanted to increase additional tax revenue and not operational burden on their part. Japanese subcustodian banks were, to be honest , not as confident in the initial phase. When NTA started threatening custodians about incorrect procedure in tax reduction filing, we thought this is going to be a problem just like JGB tax exemption.
However, when we started working with our Global Custodians, to NTA’s great surprise, we were able to submit all necessary data and subsequent tax penalty were very little.
In other word, when NTA realised that they could not get additional penalty tax, there interset were largely lost or subsided.
Today’s result were almost foreseen by then.
Yes, we will have random testing in the future.But only to see if Last years test is still valid or not.
Last year, Global Custodians have proved themselves that their system is correctly handling complex global taxing matter.
They deserve this victory!!