JAPAN Law and Practice Contributed by: Hiroaki Takahashi, Kaoru Sato, Kenji Miyagawa and Koji Kawamura, Anderson Mori & Tomotsune
to corporate tax of that transferor corporation. However, if the transferor is a foreign corpora - tion with a permanent establishment in Japan, a capital gain on the transfer of loan receivables is subject to corporate tax; no corporate tax will be levied on a foreign corporation that has no permanent establishment in Japan. No corporate tax will be levied on capital gain on the transfer of securities by a foreign corporation that has no permanent establishment in Japan. However, capital gain is taxed on the transfer of stocks in certain exceptional cases, such as: • sales of stocks of the identical issuer that the transferor has bought up; • the sale of stocks in a domestic corporation by a foreign corporation that falls into the “special relationship shareholders” with that domestic corporation; • the sale of a certain type of stock of a com - pany that has real estate of 50% or more; and • the sale of membership of a golf club in stock means. If a foreign corporation transfers real estate in Japan to a domestic corporation, the payment of the purchase price is subject to withholding tax, which must be paid by the domestic cor - poration. In addition, capital gain on the transfer of real estate in Japan by a foreign corporation that has no permanent establishment is subject to corporate tax. 7.4 Other Taxes The taxes on the payment of dividends, interest, etc, to investors of SPEs are as follows:
• dividends of specified or preference shares of TMK/GK to residents or domestic corpora - tions – 20% withholding tax is levied; • interest on bonds of TMK/GK to residents or domestic corporations – 20% withholding tax is levied (15% if an investor is a corporation); • dividends of specified or preference shares of TMK/GK to non-residents or foreign corpora - tions – 20% withholding tax is levied, subject to the relevant tax treaties; • interest on bonds of TMK/GK to non-resi - dents or foreign corporations – 15% with - holding tax is levied, provided that this tax will be exempted subject to certain conditions with respect to book-entry bonds; and • income of TK to residents or non-residents or domestic or foreign corporations – 20% with - holding tax is levied. 7.5 Obtaining Legal Opinions Tax opinions are obtained in most of the afore - mentioned transactions. In Japan, such tax opinions are usually issued by an accounting or tax firm, rather than a law firm. Tax opinions typically cover the following, based on assumptions of certain facts, but without specific qualifications: • the withholding tax implications in respect of interest income from notes, loans, beneficial interests and the like; • the same issue as above, but as applied to foreign investors; • the corporate tax implications for SPEs; • the consumption tax implications in respect of asset transfers, collections and payments in respect of assets (if those assets consist of monetary claims) and the various fees involved; • the tax implications in consideration of Japanese anti-tax haven legislation and the
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