No.12014 Real estate income of non-residents
A non-resident purchased a real estate located in Nihonbashi and is renting it out to a Japanese company. The company will withhold tax at 20.42%. How should the non-resident declare this transaction in the final tax return?
Income from renting out real estates located in Japan is considered to be income from domestic source. If a non-resident is renting out a property, the amount of lease multiplied by the tax rate of 20.42% will be withheld as withholding tax.
However, taxes will not be withheld on rent paid by individuals who rented the land and house for themselves or their relatives to reside in.
Non-residents are required to file a final tax return form to a District Director of Tax Office that has jurisdiction over the place for tax payment during the filing period for final tax return between February 16 and March 15 of the following year.
The amount of withholding tax will be settled in the final tax return process.
When a non-resident files the final tax return form, he/she is required to appoint a tax representative and submit a declaration naming the person to the Tax Office.
A tax representative administers tax affairs on behalf of a non-resident.
A tax representative should be a person who resides in Japan, such as relatives and tax accountants.
- Consultation service for national tax is available at the Phone Consultation Center of the Regional Taxation Bureaus. Please take a look at "IF YOU NEED FURTHER INFORMATION, PLEASE CONTACT" and try the phone consultation service.
