Posts Tagged ‘dividends’

Distributions: Income or capital gains for the shareholder?

August 4, 2011  |  Dividend Taxation  |  No Comments

Preparations for the tea ceremony

A lady tends to the charcoal brazier in preparation for the tea ceremony.

An issue common to many tax systems is whether a distribution made by a company to its shareholders in respect of their shares should be treated as a return of capital to those shareholders or alternatively as an item of income. Shareholder taxation will, of course, often vary dramatically depending on the characterization of such a distribution as an item of income or return of capital. Read More

Discussing Japanese financial taxation

September 17, 2010  |  Individual, News, Policy  |  No Comments

Government policy

The documents made public by the Finance Tax Research Group (below ‘FTRG’), a tax committee within the Japanese Ministry of Finance, include a listing of topics that the committee considers important Read More

The new Netherlands Japan tax treaty

September 14, 2010  |  International Taxation, Tax Treaties  |  No Comments
Signing ceremony for the new Netherlands Japan tax treaty

Signing ceremony for the new Netherlands Japan tax treaty

On August 25th 2010 the new Japan Netherlands tax treaty (below the ‘Treaty’) was signed between Mr. Koichi Takemasa, State Secretary for Foreign Affairs of Japan and His Excellency Dr. Philip De Heer, Ambassador Extraordinary and Plenipotentiary of the Kingdom of the Netherlands to Japan. Read More

Deemed dividends – calculation

July 28, 2010  |  Dividend Taxation  |  No Comments

Sapporo station in the snow, Hokkaido

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

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

A train departing from a Tokyo Metro platform

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

Tax Based Capital – Japanese “Outside Basis”?

Maiko, trainee gaisha, in Kyoto

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

Dividend Taxation – Japanese companies’ capital account

The Mejiro or White Eye a charming Japanese native bird about the size of a sparrow

This post is the first in a series looking at how the return of funds to shareholders is treated for Japanese tax purposes.  Funds can be returned to a company’s shareholders through dividends, deemed dividends, share-buy backs, return of surplus on a liquidation and other transactions (below ‘Shareholder Distributions’).

In order to understand how Shareholder Distributions are taxed Read More