When a Japan subsidiary turns profitable after years of losses, the first dividend is where mistakes happen. A Japanese CPA explains the distributable amount test, the two most common errors, director liability, and treaty withholding tax.
From 1 October 2026, the JCT credit on purchases from unregistered suppliers in Japan falls from 80% to 70%. What changes, and what finance teams should do now.
On 18 September, Jiji Press reported that Brooks Brothers Japan had been assessed for ¥2.5 billion of unreported income, with roughly ¥750 million in additional tax, following an examination by the Tokyo Regional Taxation Bureau. The issue was withholding tax on royalties. The first thing that struck me was not the amount but the fact…
Restricted Stock Units (RSUs) are a common form of compensation, especially in multinational companies. While there are plenty of articles explaining what RSUs are, this article focuses specifically on RSU taxation, filing requirements in Japan, and potential cash flow risks. When Taxes Are Paid on RSUs Depending on your company, RSUs may be granted with…
Following on from the previous piece on transfer pricing methods, this one covers why you have to bring in outside help at all, and how much of the work to hand over. The short answer Outsource the comparability analysis only. The reasoning follows. Why you cannot do it all in-house Because, essentially, you cannot. Selecting…
This piece came out of a review request from a listed Japanese manufacturer. The client was not satisfied with the transfer pricing method their tax firm had applied, and wanted a quick second opinion on it. My own transfer pricing work was three years spent on documentation for three companies, about a decade ago —…
Once a company is profitable, this one arrives eventually. The mechanics of paying a dividend look simple: approve the financial statements, pass the dividend resolution alongside them, pay it. The complications are all around the edges. The treaty application Assuming a treaty country, filing the application is what gets you the reduction or exemption from…
Converting from a kabushiki kaisha (KK) to a godo kaisha (GK) has become noticeably more common, including in the luxury sector. Most people in finance know the GK form exists. Rather fewer could say what the concrete advantages are, or what the conversion actually involves. I was in the same position until it landed on…
Withholding tax sits awkwardly between disciplines. Unlike corporate or consumption tax, it needs payroll and HR knowledge as well as accounting and tax, which is why a lot of otherwise strong finance people quietly avoid it. It is also close to unavoidable at a foreign-owned company. Almost everyone in that seat has run into it…
Last time, I wrote about Electronic Books Maintenance Act which is introduced from 2022/1/1. However, on December 10, 2021, the ruling parties in Japan announced additionally about this topic.