Japan: Samurai bonds - Relief at source procedure for Japanese corporations
Clearstream Banking’s1 depository, HSBC Japan, has confirmed that a reduced tax rate on interests from Samurai bonds is now available to Japanese corporations through the relief at source procedure upon submission of the required certification within the prescribed deadlines, as described below.
Impact on customers
The standard rate of withholding tax on interest from Japanese Samurai bonds is 20.315% in Clearstream Banking.
Japanese corporations that are designated in Act No. 34 of 31 March 1965, Part I Chapter I Article 2-3 of the Corporate Tax Act as corporations that have their head office or principal office in Japan are eligible for a reduced rate of Japanese withholding tax on interests from Samurai bonds (that is, 15.315%). Clearstream Banking does not assist in regards to the determination of the eligibility. Please consult your tax advisor for further information regarding the eligibility criteria.
A new “Samurai Bonds - One-Time Certificate of Residence in Japan - Corporation” form has been created, to allow the eligible Japanese corporations to apply for the 15.315% reduced rate on interests from Samurai bonds.
To be eligible for relief at source, all beneficial owners, including Clearstream Banking customers, on whose behalf a reduced tax rate is requested should be Japanese corporations resident of Japan for Japanese tax purposes.
The reduced withholding tax rate is available to eligible Japanese corporations through the relief at source procedure upon submission of the required certification within the prescribed deadlines, as described below.
Relief at source
Japanese corporations applying to obtain relief at source from withholding tax on interests from Samurai bonds, should submit to Clearstream Banking the following documentation:
- Samurai bonds - One-Time Certificate of Residence in Japan - Corporations (available on our Tax forms to use – Japan page), signed and completed by the Clearstream Banking customer and is valid until revoked; and
- Samurai Bonds - Amendment Instructions (available on our Tax forms to use – Japan page), if applicable.
Deadlines for receipt of documents
The above documents for relief at source from withholding tax on interests from Samurai bonds must be received by Clearstream Banking at the latest seven business days before the first income payment date, by 10:00 CET.
The Market Taxation Guide - Japan will be updated in due course.
For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for CBF customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.