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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While the reporting schedule of overseas head office is sometimes very tight because it is out of consideration of Japanese holidays and other local schedule. Despite such a hard schedule, N & M have provided the service in time and it is a great reassurance to us.

As we can get a in-depth reply from their experienced staff even for a minor question, we can consult N & M about anything without hesitation. We have nothing to worry about daily accounting in general. N & M is a necessary partner for us to facilitate our business in Japan.”

Mr. Hiroshi Ohtaka, Representative Director
Bel Japon K.K.