Japan_ WHT on dividend payment

Based on the search results, here's the breakdown regarding taxes on payments from a Japanese branch to its US home office:

  1. Branch Profit Repatriation vs. Dividends: Payments from a branch to its home office are generally considered a repatriation of branch profits, not dividends in the legal sense (which are paid by a separate subsidiary company to its shareholder).
  2. Withholding Tax on Branch Profit Remittance: Japan does not impose a withholding tax (WHT) on the repatriation of branch profits from the Japanese branch to its US home office.  
  3. Branch Profits Tax: While the US-Japan Tax Treaty allows both countries to potentially impose a branch profits tax (capped at 5% by the treaty), Japan currently does not levy such a tax on the profits remitted by a Japanese branch to its US head office. The branch profits tax mentioned in some results refers to the tax the US imposes on profits of foreign company branches operating in the US.
  4. Taxation of Branch Income: It's important to note that the profits earned by the Japanese branch before repatriation are subject to Japan's standard corporate income taxes (national and local taxes combined typically range from 30% to 34%). The absence of withholding tax applies only to the transfer of these already-taxed profits back to the US.
  5. Dividend Withholding Tax (for comparison): If the structure were a Japanese subsidiary paying dividends to its US parent company (instead of a branch remitting profits), the Japan-US tax treaty would apply specific withholding tax rates:
    • 0%: If the US parent company owns 50% or more of the voting stock of the Japanese subsidiary for the 6 months prior to the dividend payment.
    • 5%: If the US parent company owns at least 10% but less than 50% of the voting stock.
    • 10%: In other cases (e.g., portfolio dividends).

In summary: There is currently no withholding tax imposed by Japan on the remittance of profits from a Japanese branch to its US home office. The branch's profits are, however, subject to regular Japanese corporate income tax when earned

https://taxsummaries.pwc.com/japan/corporate/branch-income



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