Nagamine & Mishima Accounting Office

Accounting practice since 1989

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Commisions (Transactions outside Japan)

Commisions (Transactions outside Japan)

When making commission payments to non-Japanese entity or individuals overseas, you will need to ask the following questions regarding such commission.

1. Is the commission subject to withholding income tax?
2. Will it be subject to withholding for special reconstruction income tax?
3. Is the tax treaty applicable?

In case of intercompany commission, executed signed agreement must be in place. And to make sure of the following,

1. Actual transaction is made in accordance with the intercompany agreement
2. Proof of transaction
3. Logical explanation for the transaction amount

There are incidents when commission transaction expands to transfer pricing issues. Relevant transfer pricing documentation will be necessary in these circumstances.

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  • “Nagamine Mishima has been our service provider since our expansion into the Japanese market. They have provided valuable solutions and much needed flexibility for our business.  From junior staff support to managerial support, Nagamine Mishima has provided the support that enabled us to hit the ground running without the complication of having to hire an internal accounting department in Japan.”

    Kevin Yu, Asia Pacific

    Tesla Motors