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No.13001 Submission of Application Form for Income Tax Convention (items related to withholding)

1 Common Items

In the case where a non-resident, etc. who receives domestic source income subject to withholding has an intention of applying for a reduction in or exemption of income tax and special income tax for reconstruction which are withheld in Japan under the Income Tax Convention must submit an "Application Form for Income Tax Convention". (hereinafter referred to as the "form")(租税条約に関する届出書)
 This form has different formats depending on the payment: major types include (1) relief from income tax and special income tax for reconstruction on dividends (Form 1); (2) relief from income tax and special income tax for reconstruction on interest (Form 2); and (3) relief from income tax and special income tax for reconstruction on royalties (Form 3).
 This form must be submitted in duplicate to the payer of incomes, who has to file the original with the district director of tax office for the place where the payer resides, by the day before the payment of the incomes are made for the first time.
 If a non-resident, etc. has not submitted the form to the district director of the competent tax office by the day before the payment of incomes are made, the payer withholds tax at a tax rate that is prescribed in Japanese laws when the payment is made instead of applying an applicable tax rate that is prescribed in each Income Tax Convention concluded with Japan.
 However, a non-resident, etc. may apply for a refund of the difference between the withholding tax amount in the case where a reduction or exemption would be applied and the amount of tax withheld at a tax rate that is prescribed in Japanese laws by submitting the "form" and an "Application Form for Refund of the Overpaid Withholding Tax in accordance with the Income Tax Convention (Form 11) (PDF/303KB)"(租税条約に関する源泉徴収税額の還付請求書(様式11)) through the payer at a later date to the district director of the competent tax office.
 And if there is any change (amendment) to a form that has been submitted, it is required to submit a form stating the items, etc. to which a change has occurred no later than one day prior to the date on which the first payment is received after the change (amendment) occurred.
 However, in certain cases, if the change (amendment) results in an increase or decrease in the "Quantity of Principal" in the case where income tax on dividends is reduced, submission of a form concerning this change may be omitted.

2 In the Case of the Income Tax Convention with Limitation on Benefits Article

In the case of the Income Tax Convention with Limitation on Benefits Article which prescribes conditions for residents who may be granted benefits of the Convention, the procedure is almost the same as "1 Common Items". However, in the case where a person applies for a reduction or exemption under the Convention as income subject to the application of the Benefits Article, an "Attachment Form for Limitation on Benefits Article (Form 17)"(特典条項に関する付表(様式17)) and the "residency certification (a document proving that the person (or corporation, etc.) is a resident of the other contracting country)" is required in addition to the form.
 "Attachment Form for Limitation on Benefits Article (Form 17)" is a document which determines if the person is a resident who is subject to the Income Tax Convention and must be submitted as an attachment to the form in the case where the person has intention of applying for the application of the Income Tax Convention which has Limitation on Benefits Article.
 A non-resident, etc. is required to attach the original residency certification to the form or present it to the withholding agent.
 If the withholding agent is presented the original copy, the agent is required to state "the fact of confirmation," "name and affiliation of the individual who is making the confirmation," "the date of confirmation" and "the date of issue of the certification" in the "others" section of the form. The agent is also required to make a copy of the residency certification and keep this copy in his or her office, etc. located in Japan for five years from the date that the certification is presented. In this case, the residency certification must have been issued within one year prior to the presentation.
 In the case where an entity is treated differently for tax purposes between Japan and the other contracting country (for example, in the case where the entity is taxed as an entity in the other contracting country while members of the entity are taxed in Japan), "List of the Members of Foreign Company or List of the Partners of Entity (Form 16)(PDF/115KB)"(外国法人の株主等の名簿 兼 相手国団体の構成員の名簿(様式16)) must be attached and it is required to identify who is subject to the Income Tax Convention.

Reference: Related codes

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