Nobody likes wrestling with their taxes, especially when April 15 rolls around.  But for American companies with operations in Japan (as well as Japanese companies established here), the prospect of serious tax headaches has been avoided.
 
The revised U.S.-Japan Income Tax Convention was ratified by the Senate and the Japanese Parliament in March and will enter into force on July 1.
 
By approving the treaty in the first quarter of the year, the two countries avoided pushing its entry into force back to January 2005, resulting in six additional months of reduced withholding tax rates for U.S. companies.
 
“The treaty will improve the ability of U.S. businesses to expand and prosper in Japan,” said Andrea Fava, USCIB’s manager for taxation.  “And it will continue to encourage Japanese investment that contributes to the growth of the U.S. economy.”
 
Last December, USCIB sent letters to Sen. Richard Lugar, chairman of the Senate Foreign Relations Committee, and Sen. Joseph Biden, the ranking minority member, urging swift ratification of the revised U.S.-Japan treaty.
 
For more information: www.uscib.org/index.asp?documentID=2877