Foreign tax relief
Resident taxpayers can credit foreign income taxes against their Japanese national tax and local inhabitant’s tax liabilities (with certain limitations), where non-Japan-source income is taxed in Japan. Non-resident taxpayers are not entitled to take foreign tax credits on their Japan income tax returns unless one has a PE in Japan.
Japan has tax treaties with the following countries:
||Ireland, Republic of
||Isle of Man
||Korea, Republic of
||United Arab Emirates
- The treaty with the former Czechoslovakia is applied to the Czech Republic and the Slovak Republic.
- The treaty with the former USSR is applied to Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.
Mutual Administrative Assistance
Japan has signed a Convention on Mutual Administrative Assistance in Tax Matters and it is effective.
Base Erosion and Profit Shifting (BEPS) Agreement
Japan signed a Multilateral Convention to Implement Tax Treaty related Measures to prevent BEPS on 7 June 2017. But it is not effective until the instrument of ratification is submitted.
Designed to avoid overlaps in social security enrolment, Japan has entered into social security agreements with several countries. The agreements currently in effect are with Australia, Belgium, Brazil, Canada, the Czech Republic, France, Germany, Hungary, India, Ireland, Korea, Luxembourg, the Netherlands, Philippines, Spain, Switzerland, the United Kingdom, and the United States. Agreements with China, Italy, and Slovakia have been signed and are in the process of implementation.