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Companies in Japan need to adjust following items on their corporate tax return if the financial statements are prepared in accordance with accounting GAAP.

 

Dividend received from Japanese companies in Japan

Dividends collected from other Japanese companies are not taxable on the following cases as of April 1st, 2015.

Percentage of shares

Definition

Non-taxable amount

1. Owning 100% of the shares

Holding it through the period

All of the dividend

2. Owning more than 1/3 of shares

Holding it more than 6 months before dividend record date

All of the dividend minus the interest

3. Other

Aside from 1, 2 and 4

50% of the dividend

4. Owning less than 5% of shares

Judging it on dividend record date

20% of the dividend

 

Refunds of corporate tax in Japan

Corporation tax, Prefectural and municipal inhabitant taxes, local corporation tax and etc. are sample items under the refunds of non-taxable category if refunded. It is important that the the refunds of the business tax and the special local corporate tax are taxable since the payment of these tax are deductible.