When paying of specific domestic source income to non-residents or foreign corporations, based on the Japanese tax law, income taxes must be withheld and paid.
〇Kinds of domestic source income subject to withholding and tax rate
Representative examples are as follows;
The payer of the income subject to withholding has an obligation to withhold income taxes. If you paid without withholding, you will be charged penalty taxes.
〇Due date of withholding tax
By 10th in the following month of payment
〇Payment outside Japan
Principally, if you did the payment outside Japan, you do not need withhold. However if the payer has a PE such as a branch in Japan, the payment is deemed to be made within Japan and subject to withholding tax. In this case, the due date will be the end of next month of payment.
Where the country of residence of a non-resident or a foreign corporation has a tax convention with Japan, the tax rate will be exempted or reduced.
Please note that this news only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually.
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