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

Correcting Japanese withholding tax errors

October 4, 2010  |  Withholding tax  |  No Comments

Ema - wooden plaques on which a person writes their wish and ties to a fence or tree in the temple grounds.

Under the Japanese withholding tax system the Payor of Japanese source income on which withholding tax applies has an obligation to withhold the tax concerned and pay it over to the tax authorities.  A Payor who withholds insufficient tax may be liable to penalties and interest in respect of the underpayment.  Procedures also exist to repay the Payor for certain taxes incorrectly over-withheld. Read More

Dividend withholding tax rates under Japan’s tax treaties

October 2, 2010  |  Withholding tax  |  2 Comments

Kagura dancer, part of Shinto festival rites and an ancestor of the Noh tradition

Kagura dancer, part of Shinto festival rites and an ancestor of the Noh tradition

The table linked to this article summarizes the withholding tax rates on dividends under Japan’s different tax treaties.

The withholding tax rate on dividends under Japan’s model tax treaty is 15 per cent for portfolio investments and 5 per cent for dividends from parent-subsidiary shareholdings. Read More

Japanese withholding tax on royalties

September 26, 2010  |  Withholding tax  |  2 Comments

A tasty looking Japanese Taraba gani soup. In English, King Crab latin name Paralithodes camtschaticus

The table linked to this article summarizes the withholding tax rates on royalties under Japan’s different tax treaties.

The withholding tax rate under Japan’s model tax treaty is 10 per cent. More recent tax treaties Read More

Timing of payment, Japanese withholding tax

September 25, 2010  |  Withholding tax  |  No Comments

Shakado pass, one of a number of narrow passages in the mountains surrounding Kamakura, a historic former Japanese capital south of Tokyo.

The issue of determining whether or not an item of income has been “paid” for withholding tax purposes, thus triggering the obligation to remit the taxes withheld to the authorities within an allowed time limit, is an issue common to all withholding tax systems.

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Japanese withholding tax; legal outline and concepts

September 19, 2010  |  Latest, Withholding tax  |  No Comments

A colorful Japanese manhole cover from Matsumoto in Nagano

This article is the first in a series that outlines the structure, target income and administration of the Japanese withholding tax system.  These articles will form a foundation for understanding more complex Japanese withholding tax issues arising in an international context.

Japan has an extensive system of withholding taxes (‘WHT’) imposed on different types of income.  Read More

Interest withholding tax rates under Japan’s treaties

March 22, 2010  |  Tax Treaties, Withholding tax  |  No Comments

Rates of withholding tax on interest under Japan's tax treaties.

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TKs – treatment under different tax treaties

Table listing how TK distributions are taxed under Japan's tax treaties.

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