Shareholder Distributions

This page collates information about the Japanese taxation of transfers of assets by a corporation to its members made with respect to the shares or other interests of those members in the company concerned. This topic includes dividends as well as other returns of capital or surplus to shareholders through share buy-backs, mergers or other transactions.

Important topics in this area for corporate tax purposes include the Japanese Dividends Received Deduction for corporations, Deemed Dividends and the Japanese tax treatment of dividends from foreign shares. See below for related posts, diagrams and calculations.

Distributions to shareholders – posts

Domestic issues

Japanese taxation of a US Spin-off

08/06/2011 • On 21 April 2011 the Tokyo High Court handed down a decision concerning whether shares acquired by a Japanese resident...Read More

Distributions:  Income or capital gains for the shareholder?

Distributions: Income or capital gains for the shareholder?

08/04/2011 • An issue common to many tax systems is whether a distribution made by a company to its shareholders in respect...Read More

Japanese dividend taxation for individuals

Japanese dividend taxation for individuals

09/14/2010 • This article outlines how individuals are taxed on dividend income for Japanese tax purposes. As so often seems the case with...Read More

2010 tax reform and deemed dividends

2010 tax reform and deemed dividends

08/21/2010 • This article outlines an anti-avoidance measure included in the 2010 tax reform that prevents a shareholder applying the Japanese Dividends...Read More

Dividends and Attributable Interest

Dividends and Attributable Interest

08/04/2010 • The Japanese Dividends Received Deduction ('DRD') helps mitigate the double taxation a company would otherwise suffer through tax on dividends...Read More

Dividends and short term share holdings

Dividends and short term share holdings

07/28/2010 • In order to apply the Japanese Dividends Received Deduction ('DRD') a holding period requirement (the 'Holding Criteria') has to be...Read More

Deemed dividends - calculation

Deemed dividends – calculation

07/28/2010 • This post gives an example of the calculation of the amount of a Deemed Dividend for Japanese DRD purposes in a merger. You...Read More

Tax Based Retained Profits - Japanese

Tax Based Retained Profits – Japanese “Earnings and Profit”?

07/20/2010 • As noted in this post on Tax Based Capital, the Japanese tax system includes concepts similar to "outside basis" and...Read More

Tax Based Capital - Japanese

Tax Based Capital – Japanese “Outside Basis”?

07/20/2010 • This post looks at the Japanese tax concept of Tax Based Capital, or in Japanese 資本金等/shihonkintou.   The Japanese tax law...Read More

Deemed dividends - concept, transactions

Deemed dividends – concept, transactions

07/19/2010 • As explained in this post introducing the Japanese Dividends Received Deduction ('DRD'), Article 23-1 of the Japanese Corporate Tax Law...Read More

The Japanese Dividends Received Deduction

The Japanese Dividends Received Deduction

07/18/2010 • This post is the first in a series looking at Article 23 of the Japanese Corporate Tax Law which is...Read More

Dividend Taxation - Japanese companies' capital account

Dividend Taxation – Japanese companies’ capital account

07/05/2010 • This post is the first in a series looking at how the return of funds to shareholders is treated for...Read More

Diagrams

DRD Overview


This diagram outlines the operation of the Japanese Dividend Received Deduction.

Mergers - deemed dividends


This diagram gives an example of the calculation of a Deemed Dividend in a Japanese merger.

Leverage and the DRD


This diagram shows when funding costs attributable to a dividend may be disallowed for Japanese tax purposes.

Tables, flow charts