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Abstract
Japanese tax law does not specifically define ownership with regard to intellectual property (IP). Rather, the tax law borrows its definition of ownership from Japanese civil law. Generally, there is no difference between legal and tax ownership of IP, which makes it difficult to separate such ownership. However, some cases appear to draw a distinction between legal ownership and economic ownership of intellectual property. In such cases, tax ownership does not automatically follow economic ownership. Rather, tax ownership can follow economic ownership only when real (not apparent) legal ownership underlies such economic ownership. Consequently, if real legal ownership does not underlie economic ownership, then taxable profit may result from transactions between a legal owner and an economic owner. Rules governing the transfer of IP are examined.