The definition of Japan source interest income

November 1, 2010  |  Japan Source Rules, Withholding tax  |  No Comments

Okonomiyaki: A Japanese disk made of cabbage mixed with other flavouring and binding ingredients. Often cooked by the restaurant patrons themselves.

Where a foreign company earns income with the economic nature of interest (referred to below as ‘Funding Income’) from lending to a business carried out in Japan, investing in a bond with a Japanese issuer or from a similar transaction (referred to below as a ‘Funding Transaction’), Japanese withholding tax (‘WHT’) will apply if the income is treated as falling within defined categories of Japan source income. Read More

Japanese taxes payable by a non-resident individual

October 5, 2010  |  Individual, Japan Source Rules  |  2 Comments
A ceremonial taiko drum from Hiyoshi Taisha shrine in Shiga prefecture.

A ceremonial taiko drum from Hiyoshi Taisha shrine in Shiga prefecture.

This article looks at the scope of Japanese taxation of non-resident individuals.  This topic is also likely to be of interest to individuals who are giving up their Japanese residence status, such as non-Japanese expatriate individuals who have lived and worked in Japan for a few years who are returning to their home country or Japanese expatriates going to work overseas. Read More

Japanese taxes payable by a foreign company

September 23, 2010  |  International Taxation, Japan Source Rules  |  No Comments

A view of one of Nara's temples

Under Japanese tax law, Japanese companies are taxed on their worldwide income while foreign companies are taxed only on their Japanese source income.

This article explains when a foreign company will suffer Japanese withholding tax or when it has an obligation to file a Japanese corporate tax return. Read More

Japan source income – Basics – Articles 138 and 161

A rare remaining row of period houses in Kyoto

The source of income is a critical concept for international tax purposes given it will usually define the extent to which a particular country taxes the income of foreign persons. A foreign company which has Japanese source income as defined under Japan’s domestic law may be subject to Japanese tax Read More