For Japanese tax purposes, deduction of director remuneration is restricted. It is only deductible if it follows the rules stipulated under the tax law. We summarize general rules on deductibility of director remuneration.
A foreign corporation can conduct the business through a Japanese subsidiary or a Japanese branch of a foreign corporation. Subsidiary and branch are taxed similarly; however, there are some differences. Below is the summary of the key features and differences between Japanese subsidiary vs. branch.
If you have previously worked in both Japan and your home country and then receive a retirement allowance which Japanese withholding tax is withheld from, there may be a Japanese tax refund of retirement income in a specific situation as explained below.
You may have an investment in Japanese silent partnership so-called Tokumei Kumiai (TK). TK is one of the standard structure for investment in Japanese real estate or solar panels. Taxation would differ depending on whether TK investor is Japanese tax resident or non-resident. We summarize Japanese taxation when an investor has TK investment.
If you are a Japanese tax resident working in Japan subsidiary or branch and receive shares in parent company outside Japan based on share compensation plan, you need to file individual income tax return to Japanese tax authorities. In most cases, you need to pay additional income tax for the income equivalent to the share compensation. This may also apply to non-resident previously working in Japan during a specific period.