1 Conditions for a Refund under the Income Tax Convention

In the case where a non-resident or a foreign corporation who receives the payment of domestic source income subject to withholding (hereinafter referred to as a "non-resident, etc.") has not submitted an "Application Form for Income Tax Convention" (hereinafter referred to as the "form")(租税条約に関する届出書) through the payer to the district director of the competent tax office in the place where the payer resides by the day before the payment of domestic source income subject to withholding is made, the payer must withhold 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, by submitting both the form and an "Application Form for Refund of the Overpaid Withholding Tax in accordance with the Income Tax Convention (Form 11) (PDF/303KB)" (hereinafter referred to as the "Application for Refund")(租税条約に関する源泉徴収税額の還付請求書(様式11))in writing or by providing the matters to be described in the form and the Application for Refund by electromagnetic method (Note), through the payer at a later date to the district director of the competent tax office, the 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 income tax and special income tax for reconstruction which were withheld at a tax rate that is prescribed in Japanese laws.

(Note) Providing the Application for Refund by electromagnetic method is just like providing the form by electromagnetic method.

Please see code no.13001 "Submission of Application Form for Income Tax Convention (items related to withholding)" for providing the form by electromagnetic method.

2 Points to Note When Applying for a Refund

In the case where a non-resident, etc. has not submitted the form although the non-resident, etc. is entitled to the benefits accorded by the Convention, and applies for a refund of the difference between the withholding tax amount in case of a reduction or exemption being applied and the amount of income tax and special income tax for reconstruction which were withheld at source, the non-resident, etc. must attach to the Application for Refund both the form and the copy of documents verifying the payments and submit them all to the district director of the competent tax office through the payer.

In principle, refunds are paid to the non-resident, etc. who applied. However, if the applicant wishes to receive the refund through an Agent, a power of attorney out of the non-resident with a Japanese translation must be attached.

 In the case where the payment of the withholding tax amount was made after the due date, the principal tax itself may be refunded by applying this way, however, additional tax and delinquent tax are not refundable.
 Please be aware that formats and procedures are different when applying for the refund of withholding tax amounts on profit from redemption of discount bonds that is withheld at the time of issue as well as remuneration derived from rendering personal services exercised by an entertainer, etc., or when applying for the refund of foreign tax in the case where the other contracting country's tax is imposed on interest income.

Reference: Related codes

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