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. More recent tax treaties negotiated by Japan such as the new Netherlands Japan treaty have seen a 5 per cent rate or exemption included, but in quite a few of Japan’s older treaties the rate remains at 10 per cent, as the table shows.
Holding period, minimum shareholding
Note that Japan’s treaties commonly require a six month holding period and a shareholding of 25 per cent or more before the reduced parent subsidiary rate of withholding tax can apply, although in some cases this holding period is extended to twelve months. This ownership ratio can also range from 10 per cent to up to 50 per cent, although the 25 per cent rate is very common.
Japan’s more modern treaties also allow exemption from dividend withholding tax when specified criteria are met but these treaties – those of the US, UK, Australia, France for example – also include a limitation of benefits clause.
This table may not be up to date by the time you read this article. Be sure to also check this article for some Japan’s tax treaties in English and this article for the forms required to complete treaty claims for Japanese tax purposes.