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Question:

I request Japanese national who is non-resident to translate an essay. Is it still needed to withhold tax from the translation fee?

Answer:

According to the income tax law in Japan, the royalty of copyright is requires withholding tax as a domestic source income. The issue is whether the translation of a manuscript is the falls on the same category and it is considered that it is falls under the secondary work. Also, under the income tax law in Japan, the decision of the domestic source income is to be decided based on where the manuscript is used. Therefore, even if we request only translation to a non-resident, the general rule is still for it to withhold tax.

However, the treatment is different based on the tax treaty law of each country and withholding may not be needed depending on the country of residence of the translator.