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.
We employ staff members who are foreign nationals. Are we obliged to withhold income tax from their salaries?
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%.
How can we determine if an employee is a resident or non-resident of Japan for tax purposes?
A person who has had domicile or residence in Japan for more than one year is considered to be a resident.
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?
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.
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?
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.
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?
No, if the amount of allowance is deemed to be reasonable, they do not have to include the allowance in their taxable income.
Wako-building 4th floor,
2-2-17 Shibata Kita-ku,
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.
No.35-Arai-buliding 6F,1-1-3, Shibuya,
Shibuya-ku, Tokyo, JAPAN
7 minutes walk from JR Shibuya Station
7 minutes walk from Subway Shibuya Station
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