The Japanese tax authority website allows the download of PDFs of the forms (”Treaty Forms’) that must be completed to claim reduction or exemption from Japanese taxes under Japan’s tax treaties (to claim ‘Treaty Benefits’). Typical Treaty Benefits are reductions in the rate of Japanese withholding taxes on income or dividends.
The Treaty Forms include detailed notes in English on their completion on the reverse which should be read closely. Forms can be filed by the entity claiming the treaty benefits concerned but it is often helpful (or for practical purposes almost unavoidable) to appoint a local tax representative to file the form concerned.
Sometimes the Treaty Forms themselves require a Japanese tax return to be filed along with the form (for example, when claiming an exemption from tax on disposals of certain Japanese shares – completion is a practical impossibility for the non-Japanese speaker even for simple cases). This article explains the scope of Japanese taxation of foreign companies and when withholding tax or tax filing is required while this article has some more details around the legal definition of Japan source income in the Japanese tax code.
Please refer to the links below for the forms.
WARNING Regrettably the Japanese tax authorities’ web site does not associate a unique URL with a unique tax treaty or other tax form. Instead the URL to the PDF file of the treaty form is named after the row in which the form appears on this table starting at around row 253. This will may cause the links below to link to the wrong form when the Japanese tax authority site is updated by adding or deleting forms in the table, so please check the form itself is correct in case this site is not up to date with tax authority changes. If the link is not up to date you should still be able to find the form on the same page a row or two above or below or by searching the Japanese tax authority web site.
Tax Treaty Form for reduction or exemption of income tax on dividends. Japan imposes a 20% income withholding tax on dividends from unlisted companies under domestic law. Withholding tax rates for listed shares have been reduced and many treaties allow reduction or even exemption from this tax.
Tax Treaty Form for reduction or exemption of income tax on interest. Japan imposes a 20% income withholding tax on interest, although there are a number of domestic law exemptions available on certain qualifying bond coupon for example. See also the form 259 below for certain special types of interest. This link gives the rates of interest withholding tax under treaties with different countries.
Tax Treaty Form for reduction or exemption of income tax on royalties. Japan imposes a 20% withholding tax on royalties under domesic law.
- Foreign trust deposit certificates – postponement
Tax Treaty Form for postponement of income withholding tax on foreign deposit trust securities.
- Foreign trust deposit certificates – exemption
Tax Treaty Form for reduction or exemption of income tax on foreign deposit trust securities.
- Personal services
Tax Treaty Form for reduction or exemption of income tax on consideration paid for the business of providing personal services.
- Independent personal services, sportsmen, artists etc
Tax Treaty Form for reduction or exemption of income tax on remuneration or salaries paid to independent personal services, artists and performers, sportsmen and short term residents.
- Professors, students
Tax Treaty Form for exemption of income tax on remuneration received by professors, students and business trainees.
- Retirement monies
Tax Treaty Form for reduction or exemption of income tax on retirement pensions or insurance monies.
- Various including real estate and TK distributions
Tax Treaty Form for reduction or exemption of income tax under articls 161 3 to 7 (3 – real estate related income; 4 – certain types of interest or bond coupon; 5 – certain special types of dividends or trust distributions; 6 – interest from certain types of business loans; 7 – income for certain specified royalties) 9 (advertising prizes and other specfied items), 11 (certain types of compensation, discount and interest), 12 (distributions from Japanese silent partnerships – tokumei kumiai).
- Discounted bonds
Request for the repayment of tax withheld at source (excluding discounted bonds and consideration for the payment of artists and performers).
- Artists and entertainers, repayment
Request for the repayment of tax withheld at source for artists and performers.
- Bond discount – repayment of WHT JGBs
Request for the repayment of tax withheld at source – related to discount on bonds (for Japanese government bonds).
- Bond discount – repayment of WHT non JGBs
Request for the repayment of tax withheld at source – related to discount on bonds (for bonds other than Japanese government bonds).
- Taxes payable by filing a return
Tax Treaty Form for reduction or exemption of income tax on Japanese source income tax payable by filing a tax return or for corporation tax. This form is required on the sale of a Japanese company by a foreign company under certain circumstances (e.g. sale of 100% of shares in a company by a group holding 25% or more and other cases).
- Members of fiscally transparent entities
Make up for foreign shareholders etc. This form may be used when making claims relating to entities that are fiscally transparent for Japanese tax purposes to show the members who would be able to claim benefits for example.
- USA LOB
Limitation of benefits clause form – USA.
- UK LOB
Limitation of benefits clause form – England.
- France LOB
Limitation of benefits clause form – France.
- Australia LOB
Limitation of benefits clause form – Australia.
- Treaty qualification request
Request for determination of qualification under a tax treaty (e.g. further to certain limitation of benefits articles when the objective criteria for qualification are not met).
- Partnership contracts
Tax Treaty Form for exemption of income tax on distributions from partnership contracts.
- Repayment of taxes – taxation in other country
Request for repayment of taxes withheld at source (repayment of foreign tax in cases where there has been taxation of interest or similar in the other country).
- Exempt companies, artists and performers
Return relating to exemption of tax for companies treated as being for artists or performers.
- Taxes withheld at source , artists and performers
Form of notice that repayment cannot be made for taxes withheld at source for those imposed on consideration for the provision of services by artists, performers and similar.