Q87: I'm considering expanding from abroad to Japan. Can using tax treaties help with tax savings?
ringo tax corporationCommentary from a Japanese tax accountant
One common question we receive from those considering entering the Japanese market concerns tax treaties.
Tax treaties are agreements between countries designed to avoid double taxation and prevent tax evasion. Double taxation refers to the situation where the same income is taxed by multiple countries. Tax evasion means avoiding tax payments while still benefiting from the tax system.
A specific advantage of tax treaties is tax savings through reduced taxes on dividends and interest.
Foreign companies entering Japan and wishing to utilize tax treaties will need to undertake procedures such as applying for reductions in withholding income tax. Additionally, each country’s tax treaty has specific provisions and procedures, so it's essential to seek professional advice.
Japan has established tax treaties with many countries across North America, Latin America, Europe, Russia and NIS countries, Asia, Oceania, the Middle East, and Africa. These agreements facilitate smoother business operations between Japan and these regions.
If you have any questions or need consultation about entering the Japanese market, feel free to contact us. We are tax experts familiar with Japanese tax laws and can assist in English, so we welcome your inquiries at any time.
Japanese Certified Public Accountant ・English-speaking Japanese tax accountants Hiroya Aihara
Ringo Tax Corporation
