Japanese tax firm Hongo Tsuji Tax Co has merged with BDO Japan’s tax practice adding 16 offices and 390 staff to BDO’s tax operation.
The merged entity will trade under the name BDO Tax Co and work alongside BDO Japan KK, BDO’s audit firm in Japan. Under Japanese law, audit and non-audit businesses need to be split.
The addition means BDO now has 1,000 staff and is predicted to earn revenues of ¥12bn (€156m) in fiscal 2012.
BDO is now comfortably the fifth largest firm in Japan behind PwC, which earned ¥58.3bn in the year to 30 June 2010. Grant Thornton, placed sixth, earned revenue of ¥6.15bn in fiscal 2010 and BDO’s closest rival.
Managing partner Yoshihiro Hongo said he believes BDO Tax Co will become the third or fourth largest tax firm in the country within the next three years.
“Our larger competitors have only 4% of the tax market share in Japan, so the potential to grow is significant,” Hongo said.
“Joining BDO will enable us to grow our market share and we’re already seeing some of the larger firms going through significant downsizing, due to their large exposure to international referral clients which are off-shoring or centralising tax services in lower cost countries such as Malaysia and Singapore.”