A double tax treaty in Japan represents an agreement between Japan and another state meant to protect against the double taxation risk in those cases when the same income is taxable in both jurisdictions.
Japan is a country which has signed numerous tax treaties with jurisdictions all over the world. In some cases, draft agreements with other countries are being negotiated at the moment. Our company formation consultants in Japan can offer more details regarding the existing double tax treaties in Japan.
Table of Contents
Countries which signed double tax treaties with Japan
Another important aspect of the double tax treaties in Japan is the fact that they offer exemptions or reduced tax rates for certain receipts, like royalties, interests, dividends, capital gains and so on, which are connected to transactions effectuated between parties from the signing jurisdictions.
The countries which signed double tax treaties with Japan are: Australia, Austria, Bahamas, Bermuda, Bangladesh, Belarus, Belgium, Brazil, BVI, Brunei, Bulgaria, Canada, Cayman Islands, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Guernsey, Hong Kong, Hungary, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Jersy, Kazakhstan, Kyrgyzstan, Kuwait, Lichtenstein, Luxembourg, Macao, Malaysia, Mexico, Netherlands, New Zealand, Norway, Oman, Pakistan, Philippines, Poland, Portugal, Romania, Russia, Samoa, Saudi Arabia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Turkey, Turkmenistan, UAE, UK, Ukraine, USA, Vietnam and Zambia. When you want to open a company in Japan, we can provide you with all the necessary information related to the taxation agreement signed between Japan and your country of residence.
In those cases when a particular income is taxed according to the Japanese Income Tax Ordinance, however, there is an exemption or a tax deduction under a double tax treaty in Japan, the income is taxed, or in some cases is not taxed at all, only according to the requirements of the taxation agreement. Our company registration advisors in Japan may provide further information on this matter.
Why has Japan concluded these tax treaties?
The reason why Japan has concluded these double tax treaties is the fact that territorial double taxation evidently discourages the international trade.
In order to encourage international trade, a more advantageous environment for cross-border trading is set by establishing regulations which reduce or avoid double taxation between a company in this country and the above-mentioned jurisdictions.
If you require more information about the double taxation agreements in Japan and what they mean, or if you are considering starting a company in Japan, we invite you to speak to one of our representatives.