Japanese retailer Daiei was assessed JPY25Bn (USD294m @85) for understating taxable income for four years. The Asahi newspaper reported as follows: Read More
In order to apply the Japanese Dividends Received Deduction (‘DRD’) a holding period requirement (the ‘Holding Criteria’) has to be met relating to the shares on which the dividend concerned is paid (below, relating to the ‘Shares’). The Holding Criteria is an anti-avoidance measure intended to prevent companies buying shares shortly before a dividend is due, Read More
This post gives an example of the calculation of the amount of a Deemed Dividend for Japanese DRD purposes in a merger. You can find at this post an explanation of the Deemed Dividends concept, including the basic formulae for their calculation. This post explains Tax Based Capital, which is an important concept Read More
This post includes a table with the useful life of specified Intangible Assets that are recognised as being fixed assets subject to tax deductible amortisation under the Japanese tax code.
This category of intangible assets includes trademarks, patent rights Read More
As noted in this post on Tax Based Capital, the Japanese tax system includes concepts similar to “outside basis” and “earnings and profits” found in the US tax code. In the Japanese tax system Tax Based Retained Profits (in Japanese 利益積立金) are conceptually similar to US earnings and profits, although the detailed rules in the Japan tax system are of course very different. Read More
This post looks at the Japanese tax concept of Tax Based Capital, or in Japanese 資本金等/shihonkintou. The Japanese tax law seeks to tax shareholders on either income from their shareholdings or on capital gain or loss while simultaneously avoiding or mitigating the double taxation of corporate earnings. The concept of Tax Based Capital Read More
As explained in this post introducing the Japanese Dividends Received Deduction (‘DRD’), Article 23-1 of the Japanese Corporate Tax Law recognises that, in order to mitigate double taxation of corporate profits, certain distributions to shareholders of corporate surplus Read More
The early focus of this site is corporate and international tax issues. However for the benefit of expat using this site we will be posting on tax topics that may be of interest to non-Japanese citizens resident in Japan.
Below is an overview of the process behind filing a Japanese individual tax return along with a helpful diagram illustrating this process. Read More
This post is the first in a series looking at Article 23 of the Japanese Corporate Tax Law which is the main article dealing with the Japanese Dividends Received Deduction (‘DRD’). In particular this post addresses paragraph 1 in Article 23 which defines which types of payment by a company or other entities to its members or shareholders are eligible for the DRD (i.e. which payments are ‘DRD Dividends’). Read More