Case 3<\/p>\n
<Question>
\nRegarding non-residents, could you tell\u00a0the details? My co-worker from UK plans to work in Japan for only 5 months. In this case, is the National Income Tax imposed?\u00a0<\/p>\n
<Answer>
\nFurther information is necessary to judge the tax status precisely, however, on the premise that your co-worker won\u2019t work over 5 months, and the salary during that period will be paid by a UK company of which she is not a director, the Treaty Exemption for Short-term Business rule will be applied based upon a Japan-UK tax treaty.<\/p>\n
Japan-UK tax treaty (Article14\u2461)<\/p>\n
Remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned Contracting State if:<\/p>\n
(a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the taxable year or year of assessment concerned;<\/p>\n
(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other Contracting State; and<\/p>\n
(c) the remuneration is not borne by a permanent establishment which the employer has in the other Contracting State.<\/p>\n
Under these rule, no Income Tax will be imposed in Japan. If the above requirements are not met, a 20% withholding tax will be imposed on the salary in Japan.<\/p>\n
Additionally, \u201cAPPLICATION FORM FOR INCOME TAX CONVENTION\u201d has to be filed to the tax office to adopt this rule.<\/p>\n