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    Luckylindy13's Avatar
    Luckylindy13 Posts: 2, Reputation: 1
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    #1

    Jan 20, 2012, 05:14 PM
    Withholding tax for Japanese to US wire transfer?
    My client said she paid a 20% withholding tax when paying our invoice from Japan via wire transfer to our US account. This seems excessive and I haven't had this issue with other clients.
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #2

    Jan 20, 2012, 05:17 PM
    You have to take that up with her bank, but to me does not seem excessive, in fact rather cheap.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Jan 20, 2012, 08:58 PM
    Every country withholds tax while making payments nonresidents. So Japan must also be having 20% withholding tax on the type of services provided by you. Your client will give you withholding certificate. On your US tax return you will claim foreign tax credit by filing Form 1116.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
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    #4

    Jan 22, 2012, 04:48 PM
    Was the invoice related to services and were the services performed in Japan?
    Luckylindy13's Avatar
    Luckylindy13 Posts: 2, Reputation: 1
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    #5

    Jan 22, 2012, 10:38 PM
    The Service was provided outside Japan however the order was placed from Japan the clients law firm to our customer service team in Tokyo.
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