Frequently Asked Questions
【Koshida Accounting Firm Column Date:】
How do I transfer profits from my Japanese business to my home country?
There are several ways to transfer profits from a Japanese company to an overseas owner, including dividends and director’s compensation.
The Japanese and foreign tax treatment differs depending on the method used, and cross-border payments may create double taxation in some cases. Tax treaties and foreign tax credits may help reduce double taxation.
For this reason, the payment method should be considered as part of international tax planning before funds are transferred overseas.
Which is Better: Executive Compensation or Dividends?