AIC Tax and Consulting Co.

Q

We are a U.S. based company, and we have just registered a branch office in Japan. The main function of the branch is to purchase Japanese electric parts and export them to the U.S. head office.
Do we have to file a corporate tax return in Japan? Can we claim the net consumption tax receivables?


Yes, you must file a corporate income tax return in Japan.

Q

We employ staff members who are foreign nationals. Are we obliged to withhold income tax from their salaries?


A

You should first determine whether, for income tax purposes, each employee is a resident or non-resident of Japan
If an employee is considered a resident for tax purposes, you are required to withhold income tax from his/her salary at the same tax rate as a Japanese employee's.
If the employee is considered a non-resident for tax purposes, you are obliged to withhold an income tax of 20%.

Q

How can we determine if an employee is a resident or non-resident of Japan for tax purposes?


A

A person who has had domicile or residence in Japan for more than one year is considered to be a resident.

Q

We employed a person who is foreign national. It was a one year contract employment, but the contract term was shortened to 6 months for a substantial reason. How should we calculate the amount of withholding income tax for the employee?


A

When you hired the employee, (s)he was intended to reside in Japan for one year, so you do not have to recalculate the withholding tax retroactively.

Q

We are a Japanese subsidiary of a U.S. based corporation. Some engineers of our U.S. head office will come to Japan for a 3-month training session. During the training period, their salaries will be paid by the head office. Are they obliged to pay income tax in Japan?


A

No, if they stay in Japan for less than 183 days, they do not have to pay income tax in Japan under the US-Japan tax treaty.

Q

When our employees who are transferred from a foreign post to a Japanese office visit their home country for summer/winter holidays, we cover their travel expenses. Is the home leave travel allowance taxable income for them?


A

No, if the amount of allowance is deemed to be reasonable, they do not have to include the allowance in their taxable income.

Location

OSAKA Office

OSAKA Office

  〒530-0012
Wako-building 4th floor,
2-2-17 Shibata Kita-ku,
Osaka, JAPAN
  TEL +81-6-6292-0586
  FAX +81-6-6292-0587

Subway Midosuji line On foot-from the Umeda station exit of No.4-5 5 minutes.
JR Osaka station On foot-from central north entrance 8 minutes.




TOKYO Office

TOKYO Office

  〒150-0002
No.35-Arai-buliding 6F,1-1-3, Shibuya,
Shibuya-ku, Tokyo, JAPAN
  TEL +81-3-6427-9353
  FAX  +81-3-6893-3924

7 minutes walk from JR Shibuya Station
7 minutes walk from Subway Shibuya Station

AIC Group

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